WASHINGTON (AP) – The Obama administration failed to follow the president’s health care law in a $5 billion dispute over compensating insurers for high costs from seriously ill patients, Congress’ investigative arm said Thursday.
The opinion from the Government Accountability Office is a setback for the White House and bolsters Republican complaints that administration officials bent the law as problems arose carrying out its complex provisions. The finding may complicate efforts to stabilize premiums in the law’s insurance marketplaces, where about 11 million people get coverage.
At issue is how the administration has handled a little-known, but important program called “transitional reinsurance.” Working in the background of the law’s coverage expansion, the three-year program collects fees from employer and other private health insurance plans and channels the money to health plans that face large claims for treating patients with catastrophic medical problems.
The law specified that the fee would collect $25 billion from 2014-2016, and $5 billion of that would go directly to the Treasury. But when fee collections fell short, the Health and Human Services Department failed to allocate a share of money to the Treasury, saying it would do so later as more money came in.
Republicans cried foul and asked the GAO to examine the issue. On Thursday, Republicans got the ruling they had hoped for.