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Judges say U.S. owes ACA insurers billions

The Affordable Care Act's cost-sharing reduction payments saga continues: The Trump administration ended the payments in 2017, Congress failed to fund them, and now 3 judges have said the government is still on the hook for the payments.

The big picture: "If their decisions stand, insurers could recover roughly $12 billion a year, every year, until Congress intervenes to stop the bleeding," Nicholas Bagley writes in the Incidental Economist.

  • While Congress never appropriated the funds, which was the basis of a different lawsuit, the ACA still required the U.S. government to pay the subsidies to insurers.
  • When the payments stopped, insurers sued, and the cases are ongoing in the Court of Federal Claims.

The bottom line: It's looking unlikely that any final decision, if insurers win, will take into account that insurers have made up for the lost subsidy money by raising premiums and, thus, premium subsidies — the ACA's other form of government assistance.

  • The 3 judges have either said or suggested that this won't impact their decision.
  • That means that the possibility of insurers participating on exchanges getting a multi-billion dollar windfall has increased.

Go deeper: Health insurer loses $73 million after Trump halts ACA subsidies