Hatch, Rubio Press Administration Again on Illegal Obamacare Reinsurance Payments

Washington, D.C. – Senate Finance Committee Chairman Orrin Hatch (R-UT) and U.S. Senator Marco Rubio (R-FL) today pressed the U.S. Department of Health and Human Services (HHS) and the Department of the Treasury to answer questions asked in a letter dated March 8, 2016 regarding how the Obama Administration justified failing to make payments to the U.S. Treasury under the Obamacare reinsurance program.

Rubio and Hatch sent a letter to Secretary Sylvia Mathews Burwell and Secretary Jacob Lew on March 8, 2016 with a requested response date of March 25, 2016. It was not until April 13, 2016 that the Secretary for Legislation Jim Esquea responded on behalf of both the Department of Health & Human Services and the Department of the Treasury and failed to answer many of the specific questions asked in the letter.

Under Obamacare statute section 1341, the Department of Health and Human Services (HHS) is directed to deposit $5 billion into the U.S. Treasury’s General Fund. In May 2014, HHS issued guidance in contradiction to the law, saying the Secretary “will not allocate reinsurance collections to… the U.S. Treasury until the” insurance companies are bailed out to the full amount allowed.

A PDF of the letter is available here and the full text is below:

May 12, 2016

The Honorable Sylvia Mathews Burwell
Secretary
U.S. Department of Health & Human Services
330 Independence Avenue, SW
Washington, DC 20201

The Honorable Jacob Lew
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20229

Dear Secretary Burwell and Secretary Lew:

On March 8, we wrote to you concerning the Transitional Reinsurance Program, created under Section 1341 of ObamaCare, which Congress created to limit the insurance industry’s exposure to high cost care. That letter requested a response by March 25. On April 13, Assistant Secretary for Legislation Jim Esquea responded on behalf of both the Departments of Health & Human Services and Treasury. Unfortunately, the response letter failed to answer most of our specific questions, as detailed below.

Below is a recitation of the questions in our March 8 request, along with the response received thus far:

Question for Secretary Burwell from 3.8.16 letter:

1.    Does HHS plan to change allocations for 2016 in a manner that would make the U.S. Treasury whole for the diversions described above?

The response provided general information about the rulemaking process used to determine the allocations of the Transitional Reinsurance Program, and specifically stated, “CMS sought public comment on all aspects of its proposal to implement a prioritization of reinsurance contributions to reinsurance payments over payments to the U.S. Treasury…” and further indicated, “we will not allocate reinsurance collections to administrative expenses or the U.S. Treasury until the reinsurance payment pool for a benefit period is funded.”

2.    Which HHS officials were responsible for or had input into, Section E, Part 153 of the Section 1341 regulation? This should include not only the principle drafters but a list of offices and officials who had any role in advising or commenting on the substance of that Section.

No substantive answer provided.

3.    Which federal offices outside of HHS advised or commented on Section E, Part 153 of the Section 1341 regulation?

No answer provided.

4.    Provide all documents dated from March 11 to May 27, 2014, regarding Subsection E, Part 153 of the Section 1341 regulation. This includes memorandum and correspondence within HHS and to or from other federal offices.

The requested documents have still not been received.

Question for Secretary Lew from 3.8.16 letter:

5.    Did HHS seek Treasury’s opinion on this issue? If so, when did HHS seek that opinion and what opinion was provided?

No answer provided.

6.    What is Treasury’s current position regarding the funds it is due under Section 1341?

No answer provided.

7.    Does Treasury plan to recoup these funds?

No answer provided.

It is of utmost importance that your agencies cooperate and provide us with the relevant information requested given our role in overseeing the implementation of the Affordable Care Act. Thank you in advance for your prompt response to this request.

Please number your responses according to the corresponding question and respond no later than Friday, May 20, 2016. If you have questions, please contact Chris Armstrong with the Senate Finance Committee staff at (202) 224-4515 or Emily Bouck with the Office of Senator Marco Rubio at (202) 224-3041.

Sincerely,

Orrin G. Hatch
Chairman
Committee on Finance

Marco Rubio
United States Senator

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