Citizens Against Government Waste Supports Ending Unlawful Health Insurance Bailouts

For Immediate Release
Contact: Curtis Kalin 202-467-5318

October 13, 2017
 

(Washington, D.C.) – Citizens Against Government Waste (CAGW) President Tom Schatz issued the following statement after the Department of Health and Human Services (HHS) ended cost-sharing reduction (CSR) payments to insurance companies under the Affordable Care Act (Obamacare):

“The CSR payments were an unlawful bailout for insurance companies.  Taxpayers should welcome the Department of Health and Human Service’s decision to follow the law and protect their interests.  This decision puts the onus back on Congress to make good on its promise to repeal and replace Obamacare.” 

Background:

  • CSR payments are direct taxpayer-funded subsidies to insurance companies.
  • Obamacare did not provide for any funding for CSR payments and Congress never appropriated any funds for them.
  • The Obama administration began CSR payments illegally in 2014.
  • The House of Representatives filed a lawsuit in November 2014 charging that CSR subsidies are unconstitutional.
  • On May 12, 2016, the D.C. District Court ruled in the House’s favor and ordered an end to the payments, but the decision was stayed, and the payments were continued.
  • HHS based its decision on a letter from Attorney General Jeff Sessions, who concluded that the payments cannot be made without an appropriation, which Congress has not provided.
  • Under current law, insurers are still required to provide low-cost plans and ensure that individuals who purchase them are not saddled with additional costs.

 

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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