Moda Health Plan v. United States

Questions presented

SCOTUS records, cert granted 24 Jun 2019

To encourage health insurers to offer insurance on newly created health benefit exchanges, and to keep premiums low, the federal government made an unambiguous statutory commitment: If the costs of claims under these new health insurance policies exceeded the premiums charged in the first three years, the government would reimburse insurers a specified percentage of the difference. Numerous health insurers, including petitioners, relied on that promise, joined the exchanges, set their premiums, and incurred significant losses in providing health coverage. Congress later enacted a series of appropriations riders restricting the sources of funds available to the Department of Health and Human Services ("HHS") to pay insurers what was owed, but never amended the underlying statute. A divided Federal Circuit panel agreed that the government's initial statutory commitment was unambiguous, but relied on legislative history to hold the appropriations riders had repealed the statutory guarantee. The net effect was a bait-and-switch of staggering dimensions in which the government has paid insurers $12 billion less than what was promised. The question presented is: Whether Congress can evade its unambiguous statutory promise to pay health insurers for losses already incurred simply by enacting appropriations riders restricting the sources of funds available to satisfy the government's obligation.

Opinion summary

Etalia.ai summary of the majority opinion

The case involved the Affordable Care Act's risk corridors program, which aimed to mitigate insurer losses during the initial years of ACA implementation. Insurers like Moda Health Plan claimed that they were owed payments under this program for covering higher-than-expected costs but had not been fully compensated by the government. The Supreme Court ruled in favor of Moda Health Plan and other insurers, holding that Congress had created a binding obligation through Section 1342 of the ACA to pay these amounts. Despite later appropriations riders preventing funds from being used for risk corridor payments, the Court found that such legislative actions did not repeal or amend existing obligations established by statute. Thus, it concluded that insurers could sue for damages under Tucker Act jurisdiction because their claims were based on statutory mandates rather than mere expectations.