Me. Cmty. Health Options v. United States

• Citation: 140 S.Ct. 1308,206 L.Ed.2d 764
• Decision Date: 27 April 2020
• Docket Number: No. 18-1038,No. 18-1023, No. 18-1028,18-1023
• Parties: MAINE COMMUNITY HEALTH OPTIONS, Petitioner v. UNITED STATES; Moda Health Plan, Inc., Petitioner v. United States; Blue Cross and Blue Shield of North Carolina, Petitioner v. United States; Land of Lincoln Mutual Health Insurance Company, an Illinois Nonprofit Mutual Insurance Corporation, Petitioner v. United States
• Court: United States Supreme Court

140 S.Ct. 1308

206 L.Ed.2d 764

MAINE COMMUNITY HEALTH OPTIONS, Petitioner

v.UNITED STATES;

Moda Health Plan, Inc., Petitioner

v.United States;

Blue Cross and Blue Shield of North Carolina, Petitioner

v.United States;

Land of Lincoln Mutual Health Insurance Company, an Illinois Nonprofit Mutual Insurance Corporation, Petitioner

v.United States

No. 18-1023

No. 18-1028

No. 18-1038

Supreme Court of the United States.

Argued December 10, 2019

Decided April 27, 2020^*

Noel J. Francisco, Solicitor General, Joseph H. Hunt, Assistant Attorney General, Edwin S. Kneedler, Deputy Solicitor General, Hashim M. Mooppan, Deputy Assistant Attorney General, Jonathan C. Bond, Assistant to the Solicitor General, Mark B. Stern, Alisa B. Klein, Attorneys, Department of Justice, Washington, DC, for Respondent.

Daniel P. Albers, Mark E. Rust, Barnes & Thornburg LLP, Chicago, IL, Jonathan S. Massey, Marc Goldman, Jeremy G. Mallory, R. Craig Kitchen, Massey & Gail LLP, Washington, DC, for Petitioner.

Stephen J. McBrady, Clifton S. Elgaeten, Daniel W. Wolff, A. Xavier Baker, Crowell & Moring LLP, Washington, DC, for Petitioner.

Justice SOTOMAYOR delivered the opinion of the Court.^*

The Patient Protection and Affordable Care Act expanded healthcare coverage to many who did not have or could not afford it. The Affordable Care Act did this by, among other things, providing tax credits to help people buy insurance and establishing online marketplaces where insurers could sell plans. To encourage insurers to enter those marketplaces, the Act created several programs to defray the carriers' costs and cabin their risks.

Among these initiatives was the "Risk Corridors" program, a temporary framework meant to compensate insurers for unexpectedly unprofitable plans during the marketplaces' first three years. The since-expired Risk Corridors statute, § 1342, set a formula for calculating payments under the program: If an insurance plan loses a certain amount of money, the Federal Government "shall pay" the plan; if the plan makes a certain amount of money, the plan "shall pay" the Government. See § 1342, 124 Stat. 211–212 (codified at 42 U.S.C. § 18062 ). Some plans made money and paid the Government. Many suffered losses and sought reimbursement. The Government, however, did not pay.

These cases are about whether petitioners—insurers who claim losses under the Risk Corridors program—have a right to payment under § 1342 and a damages remedy for the unpaid amounts. We hold that they do. We conclude that § 1342 of the Affordable Care Act established a money-mandating obligation, that Congress did not repeal this obligation, and that petitioners may sue the Government for damages in the Court of Federal Claims.

I

A

In 2010, Congress passed the Patient Protection and Affordable Care Act, 124 Stat. 119, seeking to improve national health-insurance markets and extend coverage to millions of people without adequate (or any) health insurance. To that end, the Affordable Care Act called for the creation of virtual health-insurance markets, or "Health Benefit Exchanges," in each State. 42 U.S.C. § 18031(b)(1). Individuals may buy health-insurance plans directly on an exchange and, depending on their household income, receive tax credits for doing so. 26 U.S.C. § 36B ; 42 U.S.C. §§ 18081, 18082. Once an insurer puts a plan on an exchange, it must "accept every employer and individual in the State that applies for such coverage," 42 U.S.C. § 300gg–1(a), and may not tether premiums to a particular applicant's health, § 300gg(a). In other words, the Act "ensure[s] that anyone can buy insurance." King v. Burwell , 576 U.S. 473, 493, 135 S.Ct. 2480, 192 L.Ed.2d 483 (2015).

Insurance carriers had many reasons to participate in these new exchanges. Through the Affordable Care Act, they gained access to millions of new customers with tax credits worth "billions of dollars in spending each year." Id. , at 485, 135 S.Ct. 2480. But the exchanges posed some business risks, too—including a lack of "reliable data to estimate the cost of providing care for the expanded pool of individuals seeking coverage." 892 F.3d 1311, 1314 (CA Fed. 2018) (case below in No. 18–1028).

This uncertainty could have given carriers pause and affected the rates they set. So the Affordable Care Act created several risk-mitigation programs. At issue here is the Risk Corridors program.¹

B

The Risk Corridors program aimed to limit participating plans' profits and losses for the exchanges' first three years (2014, 2015, and 2016). See § 1342, 124 Stat. 211, 42 U.S.C. § 18062. It did so through a formula that computed a plan's gains or losses at the end of each year. Plans with profits above a certain threshold would pay the Government, while plans with losses below that threshold would receive payments from the Government. § 1342(b), 124 Stat. 211. Specifically, § 1342 stated that the eligible profitable plans "shall pay" the Secretary of the Department of Health and Human Services (HHS), while the Secretary "shall pay" the eligible unprofitable plans. Ibid.²

When it enacted the Affordable Care Act in 2010, Congress did not simultaneously appropriate funds for the yearly payments the Secretary could potentially owe under the Risk Corridors program. Neither did Congress limit the amounts that the Government might pay under § 1342. Nor did the Congressional Budget Office (CBO) "score"—that is, calculate the budgetary impact of—the Risk Corridors program.

In later years, the CBO noted that the Risk Corridors statute did not require the program to be budget neutral. The CBO reported that, "[i]n contrast" to the Act's other risk-mitigation programs, "risk corridor collections (which will be recorded as revenues) will not necessarily equal risk corridor payments, so that program can have net effects on the budget deficit." CBO, The Budget and Economic Outlook: 2014 to 2024, p. 59 (2014). The CBO thus recognized that "[i]f insurers' costs exceed their expectations, on average, the risk corridor program will impose costs on the federal budget." Id. , at 110.

Like the CBO, the federal agencies charged with implementing the program agreed that § 1342 did not require budget neutrality. Nine months before the program started, HHS acknowledged that the Risk Corridors program was "not statutorily required to be budget neutral." 78 Fed. Reg. 15473 (2013). HHS assured, however, that "[r]egardless of the balance of payments and receipts, HHS will remit payments as required under Section 1342 of the Affordable Care Act." Ibid .

Similar guidance came from the Centers for Medicare and Medicaid Services (CMS), the agency tasked with helping the HHS Secretary collect and remit program payments. CMS confirmed that a lack of payments from profitable plans would not relieve the Government from making its payments to the unprofitable ones. See 79 Fed. Reg. 30260 (2014). Citing "concerns that risk corridors collections may not be sufficient to fully fund risk corridors payments" to the unprofitable plans, CMS declared that "[i]n the unlikely event of a shortfall ... HHS recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers." Ibid.

C

The program's first year, 2014, tallied a deficit of about $2.5 billion. Profitable plans owed the Government $362 million, while the Government owed unprofitable plans $2.87 billion. See CMS, Risk Corridors Payment Proration Rate for 2014 (2015).

At the end of the first year, Congress enacted a bill appropriating a lump sum for CMS' Program Management. See Pub. L. 113–235, Div. G, Tit. II, 128 Stat. 2130–2131 (providing for the fiscal year ending September 30, 2015). The bill included a rider restricting the appropriation's effect on Risk Corridors payments out to issuers:

"None of the funds made available by this Act ... or transferred from other accounts funded by this Act to the ‘Centers for Medicare and Medicaid Services— Program Management’ account, may be used for payments under section 1342(b)(1) of Public Law 111–148 (relating to risk corridors)." § 227, id., at 2491.

The program's second year resembled its first. In February 2015, HHS repeated its belief that "risk corridors collections w[ould] be sufficient to pay for all" of the Government's "risk corridors payments." 80 Fed. Reg. 10779 (2015). The agency again "recognize[d] that the Affordable Care Act requires the Secretary to make full payments to issuers." Ibid. "In the unlikely event that risk corridors collections" were "insufficient to make risk corridors payments," HHS reassured, the Government would "use other sources of funding for the risk corridors payments, subject to the availability of appropriations." Ibid.

The 2015 program year also ran a deficit, this time worth about $5.5 billion. See CMS, Risk Corridors Payment and Charge Amounts for the 2015 Benefit Year (2016). Facing a second shortfall, CMS continued to "recogniz[e] that the Affordable Care Act requires the Secretary to make full payments to issuers." CMS, Risk Corridors Payments for 2015, p. 1 (2016). CMS also confirmed that "HHS w[ould] record risk corridors payments due as an obligation of the United States Government for which full payment is required." Ibid. And at the close of the second year, Congress enacted another appropriations bill with the same rider as before. See Pub. L. 114–113, § 225, 129 Stat. 2624 (providing for the fiscal year ending September 30, 2016).

The program's final year, 2016, was similar. The Government owed unprofitable insurers about $3.95 billion more than profitable insurers owed the Government. See CMS, Risk Corridors Payment and Charge Amounts for the 2016 Benefit Year (2017). And Congress passed an appropriations bill with the same rider. See Pub. L. 115–31, § 223, 131 Stat. 543 (providing for the fiscal year ending September 30, 2017).

All told, the Risk Corridors program's deficit exceeded $12 billion.

D

The dispute here is whether the Government must pay the remaining deficit. Petitioners in these...