The U.S. Supreme Court heard oral arguments Tuesday on a Maine insurer’s claim that it is owed millions of dollars by the federal government.

Community Health Options said it wrote hundreds of health care policies under the Affordable Care Act, operating under the assumption it would be reimbursed if it suffered losses on the policies. That was based on a law establishing “risk corridors” to help uninsured individuals get coverage, but Congress later limited the amount of money it would reimburse the insurers and Community Health went to court to try to recover the money it believes it was owed.

Lewiston-based Community Health lost in lower courts, but the Supreme Court agreed earlier this year to hear the case.

The constitutional question before the courts involves a principle known as “implied repeal.” Community Health and other insurers argue that Congress can’t withdraw funding as a way to repeal a program, and that it should formally change the legislation if it wants to alter the program. Simply withdrawing funding violates due process and “takings” clauses in the Constitution, the insurers argue.

Obligating the government to pay and then withdrawing the authority to make the payments represented “a massive bait-and-switch,” Paul Clement, the lawyer for Community Health and other insurers told the court Tuesday, according to a transcript of the oral arguments.

The law establishing the ACA set up the payments and it represented a “money-mandating promise” that the federal government had to honor, Clement said.


At one point, Justice Elena Kagan asked Clement if the wording in the law saying that the government “shall pay” to cover some of the insurers’ losses was sufficient to obligate the federal government to make the payments.

It might not be, Clement said, but “when you combine that with specific – specificity about what amounts are going to be paid and to whom and under what circumstances, that’s clearly sufficient” for a promise to mandate the payments.

Community Health claims it is owed $57 million under the program for two years of payments.

If the government is ordered to make the payments, the money would go to shore up Community Health’s reserves and invest in infrastructure upgrades, Kevin Lewis, the president and chief executive officer of the nonprofit, said after attending Tuesday’s court session.

“We’ve been carrying that debt,” Lewis said of the payments that were owed for 2015 and 2016.

Lewis noted that Community Health paid the government $2 million under the risk corridor program in 2014, when it was the only cooperative insurer in the country to make money.

There’s no timetable for when the court might rule, but it typically takes months to decide a case. It will likely rule before its current term ends in June.

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