Obama Administration Green-Lights Millions Of Surprise Plan Cancellations

September 28, 2016

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Source: Forbes

Once again, the Obama administration is giving insurance companies what they need, while exposing consumers to greater risk. It’s like déjà vu all over again.

In 2014, taxpayer lawsuits were challenging many of the taxes and subsidies the Obama administration was implementing in the 36 states that refused to establish health-insurance Exchanges. In Halbig v. Burwell and Pruitt v. Burwell, two lower courts agreed with the plaintiffs and declared the challenged taxes and subsidies to be illegal. The lawsuits spooked insurance companies participating in ObamaCare’s Exchanges. Without those taxes forcing consumers to buy their products, and without subsidies to hide the cost of ObamaCare coverage from consumers, they feared they would lose their shirts. The industry demanded an escape hatch if the courts struck down those taxes and subsidies.

The Obama administration obliged. As reported by Amy Lotven of Inside CMS, the Centers for Medicare & Medicaid Services inserted language into its agreements with Exchange-participating carriers that the agreements are “based on the assumption that (advanced payment tax credits) and (cost-sharing reduction payments) will be available to qualifying (e)nrollees…In the event that this assumption ceases to be valid during the term of this Agreement, CMS acknowledges that Issuer could have cause to terminate this Agreement subject to applicable state and federal law.”

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