HHS Slush Fund Elimination Act Prevents Judgment Fund Settlements with Big Insurers 

In an effort to prevent illegal bailouts for health insurers under the Affordable Care Act’s risk programs, Senator Ben Sasse (R-NE), joined by Senators Marco Rubio (R-FL), John Barrasso (R-WY) and Mike Lee (R-UT), introduced the “HHS Slush Fund Elimination Act.”

"We are going to repeal and replace Obamacare but, in the meantime, the last thing Americans need is for the Obama Administration to sneak in one last bailout on its way out the door," Sasse said. "This is simple: the law is the law and no administration can make up new rules when they don’t like the laws."

"Repealing and replacing ObamaCare is a top priority in the coming months, but one of the biggest battles we face right now is stopping the Obama Administration from ignoring and using billions in taxpayer dollars to bail out health insurance companies," Rubio said. "The American people are paying too much for health insurance already, and they shouldn’t be forced to fork over even more of their paychecks to corporations that embraced a flawed health care law. This legislation would stop the administration from squandering taxpayer dollars and help clear the way for real reform that makes health care more affordable for workers and families."

"Families have paid too high a price for the failures of Obamacare," Barrasso said. "Skyrocketing premiums and fewer choices are among the reasons why the nation will have new leadership in January. With the end of the law in sight, Congress must do everything possible to prevent additional taxpayer dollars from being illegally spent behind the backs of the American people." 

"The Obama administration has unilaterally re-written the Affordable Care Act numerous times in an attempt to save it from collapsing on itself," Lee said. "Recently, the administration also tried to circumvent the will of Congress by engaging in fiscal hijinks in an attempt to bail out insurers who have lost money thanks to Obamacare. This bill prohibits the Administration from doing so, and it is a good start towards keeping our promise to the American people to repeal this misguided law."

Background: 


The “HHS Slush Fund Elimination Act” would prohibit the government from using the Judgment Fund, or any other federal funds, to pay any final judgment, award or settlement compromise related to any lawsuits related to the ACA’s risk programs. 

Congress has twice acted to ensure that any payments to insurers through the risk-corridor program be made in a revenue-neutral manner, meaning funds from outside the program may not be used. President Obama signed this into law. Despite this clear requirement, 14 insurers are currently suing the government for more in payments than the program has generated. 

In September, HHS signaled the government would be willing to consider settling those claims using funds from outside the program.

This past January, the Congressional Research Service responded to a request from Senator Rubio and issued a legal opinion finding it would be illegal to use the Judgment Fund to settle such claims. However, there is concern the Obama Administration may still attempt to use the Judgment Fund for this purpose.

In September, Senators Sasse, Rubio, Barrasso and Lee wrote to HHS and DOJ demanding answers from HHS and DOJ about how it would settle these claims and where it would find the funds.