By Philip Klein | February 26, 2015 | 6:11 am
The U.S. Treasury Department has rebuffed a request by House Ways and Means Chairman Rep. Paul Ryan, R- Wis., to explain $3 billion in payments that were made to health insurers even though Congress never authorized the spending through annual appropriations.
At issue are payments to insurers known as cost-sharing subsidies. These payments come about because President Obama’s healthcare law forces insurers to limit out-of-pocket costs for certain low income individuals by capping consumer expenses, such as deductibles and co-payments, in insurance policies. In exchange for capping these charges, insurers are supposed to receive compensation.
What’s tricky is that Congress never authorized any money to make such payments to insurers in its annual appropriations, but the Department of Health and Human Services, with the cooperation of the U.S. Treasury, made them anyway.
Health and Human Services spending on these cost-sharing payments is one of the issues named in House Speaker John Boehner’s lawsuit against the Obama administration’s executive actions on Obamacare.
In a Feb. 3 letter to Treasury Secretary Jack Lew, Ryan, along with House Energy and Commerce Committee Chair Rep. Fred Upton, R-Mich., asked for “a full explanation for, and all documents relating to” the administration’s decision to make the cost-sharing payments without congressional authorization.
In response, on Wednesday, the Treasury Department sent a letter to Ryan largely describing the program, without offering a detailed explanation of the decision to make the payments. The letter revealed that $2.997 billion in such payments had been made in 2014, but didn’t elaborate on where the money came from. Over the next decade, cost-sharing payments to insurers are projected by the Congressional Budget Office to cost taxpayers nearly $150 billion.
Instead of detailing the basis for making the payments without appropriations, Treasury officials cited the ongoing House GOP litigation, and referred Ryan to the Department of Justice.
In a brief filed on Jan. 26, DOJ lawyers wrote that the Boehner lawsuit was incorrect in saying that the payments required annual appropriation. “The cost sharing reduction payments are being made as part of a mandatory payment program that Congress has fully appropriated,” the brief read.
But this argument is undercut by the administration’s own previous budget request.
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