Report says Obama administration failed to follow health law

The Obama administration failed to follow the president's health care law in a USD 5 billion dispute over compensating insurers for high costs from seriously ill patients, Congress' investigative arm said today.
The opinion from the Government Accountability Office is a setback for the White House and bolsters Republican complaints that administration officials bent the law as problems arose carrying out its complex provisions.
The finding may complicate efforts to stabilize premiums in the law's insurance marketplaces, where about 11 million people get coverage.
At issue is how the administration has handled a little-known, but important program called "transitional reinsurance."

Working in the background of the law's coverage expansion, the three-year program collects fees from employer and other private health insurance plans and channels the money to health plans that face large claims for treating patients with catastrophic medical problems.
The law specified that the fee would collect USD 25 billion from 2014-2016, and USD 5 billion of that would go directly to the Treasury.

But when fee collections fell short, the Health and Human Services Department failed to allocate a share of money to the Treasury, saying it would do so later as more money came in. Republicans cried foul and asked the GAO to examine the issue.

Today, Republicans got the ruling they had hoped for.
"HHS lacks the authority to ignore the statute's directive to deposit amounts (collected under the program) in the Treasury," the GAO's general counsel, Susan A. Poling, wrote.
The administration's interpretation of the law "is inconsistent with the plain language of the statute," she said.
Republicans accuse the administration of shortchanging the Treasury to "bail out" the health care law.
"The administration should end this illegal scheme immediately, and focus on providing relief from the burdens of this law," Sen. John Barrasso, R-Wyo., said in a statement. Barrasso is a leader on health care issues.

Previously, Republicans have complained that the administration was flouting the law when it delayed a requirement that larger employers must offer coverage to their workers.
It didn't help the administration's case with GAO that the original HHS plan for distributing the fee money called for paying the Treasury.