Minnesota must ensure that consumers benefit from Supreme Court ACA ruling

The more things change, the more the GOP insists on a never-ending assault on the Affordable Care Act. As today’s nationwide COVID-19 count careens toward 3 million cases, President Donald Trump’s quest to end the ACA inexplicably chugs forward. But a recent Supreme Court decision blocked GOP lawmakers’ separate attempt to kill the law. When it ruled against the Republicans, that decision ordered the U.S. to put $12 billion back into the insurance market. How regulators and advocates respond will decide whether those billions stay with insurers or get back to the consumers they were supposed to benefit all along.

The springtime court opinion was hardly a page turner. It considered the conflict between the 2010 ACA that said that the government “shall pay” a wonky “Risk Corridor” obligation to insurance companies, and the 2014 appropriations bill that said that “None of the funds made available by this Act” could be used for the Risk Corridor payments. In its ruling against the United States, the Supreme Court confirmed that “shall” is mandatory even after midterms, so the feds must pay up.

That’s how the U.S. came to owe a handful of insurance companies $12 billion. 

But the ACA did not mandate these payments for the sake of the insurance companies. Its goal of making health care affordable for everyday Americans is right there in the title. So, while the ACA promised Risk Corridor payments to insurers, it did so so that those insurers would pass cost savings to consumers. Congress enforced this goal with a metric termed Medical Loss Ratios.

Under the ACA, Medical Loss Ratio provisions require that Individual and Small Group insurance carriers spend at least .80 of every dollar on actual medical claims — not on shareholder dividends, CEO pay, and other overhead. This 80/20 rule prevents price gouging. If an insurer collected $100 million in premiums in a year but only spent $79 million on medical claims, the following year, the insurer would have to pay $1 million back to consumers in individual rebates. 

This year’s $12 billion Supreme Court decision will swing that 80/20 math. When the U.S. pays the judgment, the insurance carriers will suddenly have a whole lot more revenue than claims. The precise result will be different from carrier to carrier. But the influx of revenue is likely to push medical claims way under the 80% MLR that the ACA requires. To rebalance the ratio, carriers should have to pay the judgment over to policyholders, one overage rebate check at a time.

And the numbers are not small. One industry analyst projected that the U.S. owes Minnesota carriers nearly $385 million from the nationwide judgment. Applying the medical loss ratio after the judgment is paid, insurers like Group Health Plan, Inc. (which serves public health plans Medical Assistance and MinnesotaCare) and UCare should have to make one-time payments of $475 to $725 to all their enrollees. But they aren’t likely to do it on their own. These insurers may try various accounting and legal maneuvers to try to keep the windfall for themselves. That’s why consumers must urge the Department of Commerce, legislators, and our attorney general to keep an eye out to protect these payments for consumers — especially our most vulnerable Minnesotans on Medical Assistance and in MinnesotaCare. 

Certainly, Republican-led efforts to abolish the ACA without any replacement for the millions of Americans who depend on it could have catastrophic public-health consequences. But years of GOP work to trip the law over inadequate funding has finally met its match at the Supreme Court. Now it is up to Minnesota’s leaders to ensure that this judgment benefits the consumers the ACA intended to protect.

Jessica Intermill is a nationally recognized attorney who was diagnosed with rheumatoid arthritis when she was seven months pregnant. She advocates for affordable and accessible patient-centered health care for all. You can reach her at linkedin.com/in/jintermill/.

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