Republican pushes Ryan to launch new ObamaCare lawsuit

A House Republican is circulating a letter among his colleagues urging Speaker Paul Ryan (R-Wis.) to sue the Obama administration to prevent millions of dollars in legal settlements with ObamaCare insurers. 

The letter from Rep. Chris Stewart (R-Utah) says a lawsuit should be initiated to prevent a potential payout from an obscure legal fund at the Treasury Department.

{mosads}While making payouts from the fund could help shore up health insurers that have lost money from ObamaCare plans, Republicans say it would be a “bailout” that would illegally circumvent restrictions imposed by Congress. 

“We urge you to initiate a civil action on behalf of the House of Representatives in Federal court,” to stop the payments, the letter to Ryan reads.  

“Such an egregious misuse of taxpayer funds is not only a violation of the law but also represents an institutional challenge to the legislative branch and should be met with the fullest opposition from the House of Representatives,” the letter states.

“If such a payment is not met with a challenge from Congress, there is no limit to any Administration’s ability to decide which of its priorities to fund.” 

Stewart’s office said it believes the lawsuit could go forward even before any settlements are actually paid out. 

The letter comes as Republicans are mulling the best way to try to stop the administration from paying out settlements to insurers, though it is still an open question whether the administration will try to do so.

Another option for the GOP would be blocking the payouts legislatively, perhaps by inserting language into a year-end government funding bill. 

At issue is an ObamaCare program called risk corridors that was designed to cushion insurers against heavy losses in the early years of the law. It was supposed to accomplish that by shifting money from insurers faring better to those faring worse. 

But nowhere near enough money has come in to cover the payouts, meaning insurers were paid only 12 cents on the dollar and were left with a hole in their finances, on top of other ObamaCare-related problems they were already facing.

Some insurers have cited that shortfall as a reason they are withdrawing from ObamaCare marketplaces altogether this year.

Several insurers have now sued the administration, saying they are owed the rest of the money, which is roughly $2.5 billion. The administration could seek to pay the insurers out of the “Judgment Fund” in the Treasury Department, which is used for legal settlements. 

Republicans, though, say such a move would be contradicting the clear will of Congress, which has passed a measure, championed by Sen. Marco Rubio (R-Fla.), preventing the administration from shifting funds into the risk corridor program. 

It is still unclear if the administration will pursue settlements. The Department of Justice filed motions to dismiss two of the insurer lawsuits last week, forcefully arguing that the government doesn’t actually owe them any money because Congress has since passed legislation limiting the funds. 

In contrast, the Department of Health and Human Services has said that the insurers are in fact owed money, and it sparked uproar among Republicans last month by releasing a memo inviting insurers into settlement talks. “We are willing to begin such discussions at any time,” the memo said.

“By passing the Rubio amendment, Congress has been clear that no taxpayer dollars are to go to failing insurance companies under Obamacare,” Ryan spokeswoman AshLee Strong wrote in an email, when asked about Stewart’s letter. “We are looking at our options.”

Stewart said his office had only begun circulating his letter on Thursday, so he did not know how many lawmakers would sign. He said he had gotten about a “dozen” members onto the letter so far.

House Republicans have already sued the administration over separate ObamaCare payments that they say are illegal. Republicans won their case in the lower court, but the decision is being appealed. 

Stewart said that his office has spoken with the Speaker’s staff, and that while they are open to a lawsuit, they would prefer a legislative solution. 

“They certainly understand our frustration,” Stewart said of Ryan’s staff. “And they are looking for every avenue they can as well to stop it.”

“They definitely are open to the idea of litigation,” Stewart added. “All of us, it’s our last option. The last thing we want to do is govern by suit.”

But Stewart said that in his opinion, a lawsuit could be the only way to stop the settlement payments. He said that a bill might not be enacted in time to stop the payments, and the administration might be able to get around additional legislation anyway.  

And even if language were put in the government funding bill, he said President Obama might not sign it.  

“If we included this language, we’re not sure the president would sign an appropriations bill that had this language in it, and then we’re faced with this option, well do we shut down the government?” Stewart said. “I mean that’s the last thing I think any of us want to do. And so again that brings us back to well, we’re now talking about maybe the courts will enforce the law.”