WASHINGTON, D.C. - House Energy and Commerce Committee Chairman Fred Upton (R-MI), Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA), and Health Subcommittee Chairman Joseph Pitts (R-PA) yesterday sent a letter to Marilyn Tavenner, President and CEO of America’s Health Insurance Plans (AHIP), regarding recent actions by the Centers for Medicare and Medicaid Services (CMS).
Last month, CMS announced reinsurance payments for the 2015 benefit year, amounting to billions of dollars in handouts to insurance companies. These taxpayer dollars should have gone to the Treasury, as clearly dictated in Section 1341 of Obamacare. Tavenner previously held the post of CMS Administrator when many of the key decisions were made to shift billions from taxpayers to insurers.
“CMS’s actions violate federal law," write Upton, Murphy, and Pitts. “PPACA clearly states that funds allocated to the U.S. Treasury cannot be used for reinsurance payments to health insurers. A legal memorandum authored by the non-partisan Congressional Research Service (CRS) also questions the legality of CMS’s decision, concluding that CMS actions ‘appear to be in conflict with a plain reading of §1341(b)(4).’ The statute unambiguously states that each health insurer’s contribution to the reinsurance program must contain an amount that reflects the Treasury’s proportionate share, and that those shares must be deposited to the U.S. Treasury. CRS notes that ‘a contrary agency interpretation would not be entitled to deference under Chevron.’"
The leaders continue, “Although some reinsurance payments have already been disbursed to insurance companies, the Committee understands that substantial payments have not yet been made. If CMS continues to make these payments to insurers, it would constitute a violation of the Anti-Deficiency Act. Additionally, given the collaborative relationship between insurance companies and their regulators, there have been questions raised about the role of insurance companies in securing and negotiating reinsurance payments from CMS."
In concluding the letter, the leaders request a briefing be provided to committee staff within one week of receiving the letter, and documents pertaining to the reinsurance program within two weeks of receiving the letter.
Letters were also sent to Aetna, Anthem, Blue Cross Blue Shield Association, Cigna, Humana, and UnitedHealth Group.
Read the letters online here.
