A Maine-based health insurance cooperative is suing the federal government over a decision to stop some reimbursements under the Affordable Care Act.
Community Health Options, based in Lewiston, filed the lawsuit in federal court, seeking nearly $5.7 million in reimbursements that were supposed to be issued during the last three months of 2017.
The nonprofit previously sued the federal government in 2016 for $23 million over a program designed to shield insurers from losses and is appealing a federal judge’s ruling against it in that case.
In the latest suit, CHO claims the federal government illegally stopped the reimbursement payments. Federal officials argue the payments had to be stopped because lawmakers had not appropriated money for the program.
The suit concerns a requirement that insurers provide reductions in insurance premiums for those who are eligible for tax credits in return for buying health insurance. CHO said it provided those reductions because the Affordable Care Act requires the federal government to reimburse insurers for those reductions.
According to CHO’s suit, the wording of the health insurance law, commonly called Obamacare, says the federal agencies “shall make” the payments.
“The statutory guarantee of reimbursement is one of the ACA’s linchpins,” the suit, filed in the U.S. Court of Federal Claims, says. “Insurers have no ability to adjust premiums mid-year … (and) carriers are left to meet their obligations and the (federal) government’s obligations due to the government’s refusal to meet its statutory obligations.”
CHO is the state’s largest insurance cooperative and was set up to provide coverage under the ACA, primarily to individuals and some small groups.
After initially turning a small profit, the cooperative has struggled under a high number of claims by its members and a rate-setting process that only allows insurers to seek rate increases once a year. However, it did report another small profit in early 2017.
In addition to the $5.7 million in reimbursements, the suit asks for interest payments and lawyers’ fees.