No Obamacare Bailout Without Congressional Approval: GAO

The Obama administration does not have the legal authority to bail out health insurance companies that are losing money from providing Obamcare-compliant plans without the OK of Congress, a legal opinion from the Government Accountability Office said Tuesday.

President Barack Obama and Health and Human Service Secretary Sylvia Burwell. (AFP PHOTO/Mandel NGAN MANDEL)

The GAO opinion says Congress must appropriate funds for the Department of Health and Human Services to pay federal dollars to prop up the losses of insurance companies for fiscal year 2015.

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Sen. Jeff Sessions (R-Ala.), the ranking member of the Senate Budget Committee, asked the GAO for the opinion.

“Following the law matters. We had serious concerns with the legality of the Obama administration’s plan from the get go, and the government’s watchdog confirms we were right,” Upton said in a statement. “Today’s report sounds the alarm once again on the administration’s efforts to unlawfully subsidize its health care law with taxpayer dollars. American taxpayers are already on the hook for a still-incomplete health exchange with a price tag that exceeds $2 billion.”

The risk corridor program is a part of the Affordable Care Act that limits the profits or losses that an Obamacare-participating insurer can accrue. Participating insurers that make bigger profits must remit a portion of that profit to the government. Those funds are deposited into an account to reimburse insurers that suffer excessive losses.

Critics of Obamacare, such as conservative columnist Charles Krauthammer, have likened the risk corridor program to a government bailout.

President Barack Obama’s proposed fiscal year 2015 budget includes a provision to allow the HHS to disburse the money without oversight from Congress. The GAO, the government’s watchdog agency, said that’s not the case.

“GAO has confirmed beyond dispute that the Department of Health and Human Services has no legal authority to disburse risk corridor payments under Obamacare absent a congressional appropriation” Sessions in a statement. “I hope this nips in the bud any ideas this overreaching Administration might have of paying out money not appropriated by Congress. Such expenditures would violate bedrock separation of powers principles in the Constitution.”

The House Oversight and Government Reform Committee issued a report in July that said taxpayers could be on the hook for $1 billion to bailout insurance companies taking a loss from providing Obamacare-approved health plans.