Maine Community Health Options v. United States

Wikipedia · Justia (with opinion) · Docket · oyez.org

Argued on Dec 10, 2019.
Decided on Apr 27, 2020.

Petitioner: Maine Community Health Options.
Respondent: United States.

Advocates:

Paul D. Clement (for the petitioners)
Edwin S. Kneedler (Deputy Solicitor General, Department of Justice, for the respondent)

Facts of the case (from oyez.org)

Congress, in order to persuade the nation’s health insurance industry to provide insurance to previously uninsured or uninsurable persons, the legislation creating the Affordable Care Act provided that insurance losses over a designated percentage would be reimbursed, and comparable profits would be turned over to the government.

In reliance on the government’s commitment to reimburse them, the nation’s insurance industry provided the designated health insurance. However, when some carriers experienced significant losses, the government refused to appropriate the funds to pay the statutory shortfall and prohibited existing funds from being used for this purpose. As a result, the insurers did not receive reimbursement.

Several of these insurance carriers filed suit against the government seeking reimbursement. The courts denied them the relief they sought, in part relying on the “cardinal rule” disfavoring implied repeals, which applies with “especial force” to appropriations acts and requires that repeal not to be found unless the later enactment is “irreconcilable” with the former.

Question

Do the insurance carriers in this case have a right to payment under the “Risk Corridors” program of the Affordable Care Act?

Conclusion

The insurance carriers in this case have a right to payment under the “Risk Corridors” program of the Affordable Care Act, Congress did not repeal the obligation of the federal government to pay the carriers, and the carriers can sue for payment under the Tucker Act in the Court of Federal Claims.

Justice Sonia Sotomayor delivered the opinion for an 8-1 majority. First, the Court considered whether the Risk Corridors program, Section 1342 of the Affordable Care Act, obligated the federal government to pay participating insurers the full amount calculated by the statute. Congress may create an obligation directly through statutory language, which it did through the Risk Corridors program, in plain language. Thus, the legal duty of the government became a legal liability when the insurance carriers participated in the health care exchanges.

Second, the Court considered whether Congress impliedly repealed the obligation by passing appropriations riders. The Court first noted its “aversion to implied repeals,” especially in the context of appropriations. For an implied repeal, the government must show more than merely the failure to appropriate sufficient funds, which it did not do here.

Finally, the Court considered whether the insurance carriers properly brought suit under the Tucker Act in the Court of Federal Claims. Although the federal government is immune from suit unless it unequivocally consents, it waived immunity for certain damages suits in the Court of Federal Claims through the Tucker Act. A claim falls within the Tucker Act’s immunity waiver if: (1) the claim “can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained,” (2) the obligation-creating statute does not provide its own detailed remedies, and (3) the Administrative Procedure Act does not provide an avenue for relief. In this case, the Court found that the insurance carriers’ claim satisfied this test and was thus properly brought under the Tucker Act in the Court of Federal Claims.

Justices Clarence Thomas and Neil Gorsuch joined the majority opinion except as to the part discussing the legislative history of the appropriations riders.

Justice Samuel Alito filed a dissenting opinion, arguing that the majority’s decision “infers a private right of action” where Congress did not expressly create one. Specifically, Justice Alito questioned the test the Court has used (and used in this case) to determine whether a claim may be brought against the United States under the Tucker Act.

[18-1023] Maine Community Health Options v. United States

Supreme Court Oral Arguments

[18-1023] Maine Community Health Options v. United States