On August 12, Judge Rebecca Ebinger of the United States District Court for the Southern District of Iowa entered the first decision in one of the growing number of cases challenging the administration of the premium stabilization programs, denying a motion for a preliminary injunction. The Iowa case is different from the others in that it was brought by the Iowa Insurance Commissioner, Nick Gerhart, in his capacity as liquidator of CoOpportunity Health, one of the failed health insurance CO-Ops. Gerhart seeks to recover money that the federal government owes the CoOpporunity under the reinsurance and risk corridor program; the federal government has been withholding the money as an offset to money owed by CoOpporunity under its startup and solvency loans and the risk adjustment programs.
Commissioner Gerhart sought a preliminary injunction ordering the Department of Health and Human Services (HHS) to submit to the jurisdiction, and comply with the orders, of the Iowa court handling the liquidation proceedings. That court had prohibited HHS from engaging in self-help to withhold the funds. He also asked the court to order HHS to enter into negotiations and reach an agreement with the liquidators as to the withheld funds.
Before a court can enter a preliminary injunction, the movant must show that 1) it is likely to prevail in the merits, 2) it will suffer “irreparable harm” that cannot be redressed by money damages if the preliminary injunction is not granted, 3) the balance of the harm that will result from granting or not granting the injunction favors the movant, and 4) granting the injunction is in the public interest.
Judge Ebinger did not resolve the question of which party was most likely to prevail in the lawsuit, although she questioned whether HHS had waived the government’s sovereign immunity from the lawsuit in state courts and therefore whether her court had jurisdiction. Rather, in rejecting the motion for a preliminary injunction, she relied heavily on the lack of irreparable injury. She noted that the liquidators were merely seeking money from the federal government and that they had an adequate remedy in a lawsuit in the federal Court of Claims for what they were owed.
Of greater interest, however, was the judge’s ruling on the balance of the harms and public interest questions. She noted that the risk adjustment program depends on insurers that have low-risk enrollees paying into the program so that insurers with high-risk enrollees can be paid. If HHS had to forgo the $5.2 million CoOpportunity owed, it would not be able to pay other insurers the funds they were owed by the risk adjustment program and the program would be disrupted.
The CoOpporunity case is, as noted, different from the other risk corridor and risk adjustment cases pending in the federal courts. If, however, Judge Ebinger’s concern for the operation of the programs is shared by other judges, litigation challenging the risk adjustment program, at least, could face an uphill battle.
Hardship Exemption For Those Not Able To Get Tax Credit In Advance
On August 12, 2016, the Center for Medicare and Medicaid Services (CMS) released a guidance recognizing a new hardship exemption from the individual responsibility requirement for individuals who qualify for the Health Coverage Tax Credit (HCTC) but are not enrolled in HCTC-qualifying coverage. The HCTC is a tax credit equal to 72.5 percent of the applicable premium available to individuals receiving trade adjustment assistance or individuals age 55 and older receiving payments from the Pension Benefit Guaranty Corporation.
The HCTC expired in 2013. It has been reinstated, but advance payments of the tax credit may not be available to some individuals by July of 2016 as anticipated. These individuals will be able to claim the tax credit when they file their 2016 taxes. Some, however, may not be able to afford to pay their premiums in the interim without an advance tax credit and may cancel their coverage. Individuals who do so may claim through their 2016 tax filings a hardship exemption from the individual responsibility requirement tax for any months between July and December 2016 when they were without coverage.
from Health Affairs BlogHealth Affairs Blog http://ift.tt/2aOmlio
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