U.S. Senator Ben Sasse, the author of the Taxpayers Before Insurers Act,”issued the following statement after the Government Accounting Office (GAO) issued a new legal opinion siding against The Department of Health and Human Services’ implementation of Obamacare’s reinsurance program. 

"GAO's new legal opinion is simple: the law is the law and HHS broke it,” said Sasse. “Washington has been running a textbook, crony scheme: cutting checks to big insurance companies that can afford lobbyists instead of giving taxpayers the $5 billion they’re owed. Congress must put taxpayers ahead of insurance companies.”


Today, the GAO issued a new legal opinion, concluding “
that HHS lacks authority to ignore the statute’s directive to deposit amounts from collections under the transitional reinsurance program in the Treasury and instead make deposits to the Treasury only if its collections reach the amounts for reinsurance payments specified in section 1341. This prioritization of collections for payments to issuers over payments to the Treasury is not authorized.” (Emphasis added.)

Like the Affordable Care Act’s risk corridor program, the reinsurance program is designed to protect big insurance companies.

The law requires the Secretary of HHS to deposit $5 billion total from 2014-2016 to Treasury through the reinsurance program. Rather than make those deposits to the Treasury, HHS has decided to prioritize payments to insurance companies.

Ignoring the clear text of the law, HHS has prioritized payments to insurance companies rather than payments to the Treasury: In 2014, the Treasury should have received $2 billion in general fund payments but received nothing even though HHS sent insurance companies the full $8 billion in reinsurance payments they requested. HHS also carried over another $1.7 billion to give insurance companies later. For 2015, HHS said they would give Treasury only $500 million of the $2 billion it should receive but insurers will receive a $7.7 billion payout ($6 billion for 2015 plus the $1.7 billion carried over from 2014). 

In April, Senator Sasse introduced the “Taxpayers Before Insurers Act.” This legislation would slash 50 percent of HHS’ general departmental management fund unless the Secretary of HHS pays the full amount taxpayers are owed.