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U.S. Paid Insurers Funds Meant for Treasury, Auditors Say

U.S. Paid Insurers Funds Meant for Treasury, Auditors Say
October 5, 2016

In a legal opinion issued on Sept. 29, Government Accountability Office (GAO) auditors said the Obama administration violated the law by paying insurers more than allowed under the Affordable Care Act (ACA) in an effort to curb insurance premium increases. Some of the money was supposed to be deposited in the Treasury, they explained.

The Obama administration defended its interpretation of the law, saying the payments to insurers were necessary. Matt Inzeo, a spokesperson for the Department of Health and Human Services (HHS), says the administration feels it had the discretion to decide how the money should be allocated between insurers and the Treasury when the total amount available was less than expected.

While the GAO does not have enforcement power, its rulings are typically followed by federal officials, and Congress relies on its work when writing laws and supervising federal agencies.

The ruling also could complicate administration efforts to negotiate a settlement with various insurance companies that have sued the government, which say they received much less money than they were promised under the ACA’s temporary reinsurance program.

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