GOP: ObamaCare cost-sharing payments unlawful

House Republican lawmakers are asking the Obama administration to defend its payments to health insurance companies under ObamaCare’s cost-sharing reduction program.

In letters sent Tuesday, Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Ways and Means Committee Chairman Paul Ryan (R-Wis.) accused the administration of “unlawfully and unconstitutionally misusing” federal money to fund the program.

{mosads}The messages to the Health and Human Services (HHS) and Treasury Departments state that the administration made payments to insurers out of an account intended for consumer tax refunds and without an appropriation from Congress.

“Article 1 of the U.S. Constitution expressly prohibits the expenditure of public funds without an appropriation made by law,” the letters stated.

“Accordingly, it appears … that the Treasury Department has made and continues to make these payments, even though no funds are lawfully available to do so.”

The debate pits Republicans’ interpretation of the Constitution against federal agencies’ practice of moving money between funds to cover costs. Supporters say this practice is legal and routine.

The payments to insurers totaled $2.7 billion through November 2014, Upton and Ryan wrote.

The GOP has wrangled with the Obama administration since 2013 over payments under the healthcare law, including risk corridors — a temporary program intended to bring insurers into the new marketplaces and avoid major premium hikes for consumers.

The law’s cost-sharing subsidies are intended to lower out-of-pocket medical costs for eligible families who make up to 250 percent of the poverty level and choose a silver plan on the exchange. The reductions are applied automatically to deductibles, copayments and coinsurance. 

In response to the letter, HHS said the payments are valid and a “key part of providing more Americans with access to quality healthcare.”

“This financial assistance helps low-income Americans to see their doctor on a regular basis and afford their out-of-pocket health care expenses,” said HHS spokeswoman Meaghan Smith in a statement.

“The cost-sharing reduction payments are being made as part of a mandatory payment program that provides payments to insurers upfront to reduce the cost of insurance for consumers. Congress has fully appropriated that program.”

—This post was updated to include HHS’s statement at 10:47 a.m.