Appeals court upholds order to pay ACA cost-sharing reductions

The U.S. Court of Appeals for the Federal Circuit today affirmed a 2019 court order requiring the federal government to reimburse insurers for unpaid cost-sharing reductions provided through the Affordable Care Act’s health insurance exchanges in 2017 and 2018.

The court also held in a related case that the Court of Federal Claims Court “must reduce [an] insurers’ damages by the amount of additional premium tax credit payments that [an] insurer received as a result of the government’s termination of cost-sharing reduction payments.”  

Insurers use the ACA’s cost-sharing reductions, which the administration stopped reimbursing in 2017, to reduce out-of-pocket costs for low-income individuals purchasing coverage through the exchanges. 

The court held that the government has “an unambiguous obligation” to reimburse the money, which is enforceable through a damages action in the Court of Federal Claims.