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Maine Community Health Options v. United States

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Supreme Court of the United States
Maine Community Health Options v. United States
Term: 2019
Important Dates
Argument: December 10, 2019
Decided: April 27, 2020
Outcome
Reversed and remanded
Vote
8-1
Majority
Sonia Sotomayor • Chief Justice John G. Roberts • Clarence Thomas • Ruth Bader Ginsburg • Stephen Breyer • Elena Kagan • Neil Gorsuch • Brett Kavanaugh
Dissenting
Samuel Alito


Maine Community Health Options v. United States is a case argued before the Supreme Court of the United States on December 10, 2019, during the court's October 2019-2020 term. The case came on a writ of certiorari to the United States Court of Appeals for the Federal Circuit. The case was consolidated with Moda Health Plan Inc. v. United States and Land of Lincoln Mutual Health Insurance Co. v. United States.[1]

The court reversed the Federal Circuit's decision in an 8-1 ruling and remanded the case, holding that the risk corridors statute created a government obligation to pay insurers the full amount set out in §1342's formula, Congress did not impliedly repeal the obligation through its appropriations riders, and petitioners properly relied on the Tucker Act to sue for damages in the Court of Federal Claims.[2] Click here for more information.

HIGHLIGHTS
  • The case: As part of Section 1342 of the ACA in 2010, the federal government established a program to lessen the risk of insurers entering the new health insurance marketplace. Under the program, the government agreed to pay a portion of the costs to insurers who experienced higher-than-expected costs. In 2014, Congress included a provision barring HHS from using its appropriations toward Section 1342 payments. Insurer Maine Community Health Options sued the federal government. On appeal, the Federal Circuit held the government was not obligated to distribute payments under Section 1342 because of Congress' appropriations provisions.
  • The issue: (1) Given the "cardinal rule" disfavoring implied repeals—which applies with "especial force" to appropriations acts and requires that repeal not be found unless the later enactment is "irreconcilable" with the former—can an appropriations rider whose text bars the agency's use of certain funds to pay a statutory obligation, but does not repeal or amend the statutory obligation, and is thus not inconsistent with it, nonetheless be held to impliedly repeal the obligation by elevating the perceived "intent" of the rider (drawn from unilluminating legislative history) above its text, and the text of the underlying statute? (2) Where the federal government has an unambiguous statutory payment obligation, under a program involving reciprocal commitments by the government and a private company participating in the program, does the presumption against retroactivity apply to the interpretation of an appropriations rider that is claimed to have impliedly repealed the government's obligation?[3]
  • The outcome: The court reversed the Federal Circuit's decision in an 8-1 ruling and remanded the case, holding that the risk corridors statute created a government obligation to pay insurers the full amount set out in §1342's formula, Congress did not impliedly repeal the obligation through its appropriations riders, and petitioners properly relied on the Tucker Act to sue for damages in the Court of Federal Claims.


    • You can review the lower court opinions here for Maine Community Health Options v. United States, here for Moda Health Plan Inc. v. United States, and here for Land of Lincoln Mutual Health Insurance Co. v. United States.

    Timeline

    The following timeline details key events in this case:

    • April 27, 2020: The U.S. Supreme Court reversed the United States Court of Appeals for the Federal Circuit's decision and remanded the case.
    • December 10, 2019: Oral argument
    • June 24, 2019: The U.S. Supreme Court agreed to hear the case.
    • February 4, 2019: Maine Community Health Options, Moda Health Plan Inc., and Land of Lincoln Mutual Health Insurance Co. the petitioners, filed a petition with the U.S. Supreme Court.
    • July 9, 2018: The U.S. Court of Appeals for the Federal Circuit rejected Maine Community Health Option's appeal.

    Background

    On June 24, 2019, the U.S. Supreme Court agreed to hear Maine Community Health Options v. United States, Moda Health Plan Inc. v. United States, and Land of Lincoln Mutual Health Insurance Co. v. United States as consolidated cases.[4]

    Section 1342 of the ACA

    See also: Obamacare overview

    The Patient Protection and Affordable Care Act (ACA), signed into law in 2010, required most individuals to obtain health insurance and required most employers to offer it. Section 1342 of the ACA established a three-year program to help lessen the risk of insurer participation in new health insurance exchanges. Under Section 1342's program, administered by the U.S. Department of Health and Human Services (HHS), the government "shall pay" part of an insurer's costs if that insurer experienced higher-than-expected costs. If an insurer experienced lower-than-expected costs, Section 1342 required the insurer to pay a portion of the savings to the federal government.[5]

    Congress included appropriations riders—or provisions—in its fiscal year 2015, 2016, and 2017 appropriations bills that prohibited HHS from using its respective appropriation for Section 1342 payments.[5]

    Litigation

    In August 2016, Maine Community Health Options, a nonprofit corporation, filed a case in the United States Court of Federal Claims against the United States government to recover nearly $57 million in unpaid debts it believed the government was legally obligated to pay under Section 1342 of the (ACA). The government moved to dismiss the case. The Court of Federal Claims ruled the government was not obligated to repay the debt because of provisions in the appropriations bills from fiscal years 2015, 2016, and 2017, prohibiting the use of funds to make Section 1342 payments.[5]

    Maine Community Health Options appealed the court's ruling. In the United States Court of Appeals for the Federal Circuit, the litigation was put on hold pending Moda Health Plan Inc. v. United States and Land of Lincoln Mutual Health Insurance Co. v. United States, which involved the same issues.[5]

    In Moda, the U.S. Court of Federal Claims ruled the federal government should honor its payment commitment under Section 1342. On appeal, the Federal Circuit reversed in a divided decision. According to the petition submitted by Moda Health Plan:[6]

    “ The majority recognized that §1342 'unambiguously' obligated the government to make the full payments owed. But it nevertheless held that the later-enacted appropriations riders expressed a 'clear intent' to override that unambiguous obligation. ... That holding disregards literally centuries of precedent holding that a later statute cannot be construed to repeal or suspend an earlier one unless that construction is 'necessary and unavoidable.'[7] ”


    After ruling in Moda, the Federal Circuit entered judgment against Maine Community Health Options and rejected the organization's appeal for an en banc review.[5]

    Similarly, in Land of Lincoln Mutual Health Insurance Co. v. United States, Land of Lincoln filed suit against the federal government over Section 1342 payments. In 2016, the Court of Federal Claims found HHS was not liable to repay Land of Lincoln under Section 1342. On appeal, the Federal Circuit affirmed the Court of Federal Claim's judgment.[8]

    Questions presented

    The petitioner, Maine Community Health Options, presented the following questions to the court:

    Questions presented:

    (1) Given the "cardinal rule" disfavoring implied repeals—which applies with "especial force" to appropriations acts and requires that repeal not be found unless the later enactment is "irreconcilable" with the former—can an appropriations rider whose text bars the agency's use of certain funds to pay a statutory obligation, but does not repeal or amend the statutory obligation, and is thus not inconsistent with it, nonetheless be held to impliedly repeal the obligation by elevating the perceived "intent" of the rider (drawn from unilluminating legislative history) above its text, and the text of the underlying statute?

    (2) Where the federal government has an unambiguous statutory payment obligation, under a program involving reciprocal commitments by the government and a private company participating in the program, does the presumption against retroactivity apply to the interpretation of an appropriations rider that is claimed to have impliedly repealed the government's obligation?[3]


    The petitioner, Moda Health Plan, Inc., presented the following questions to the court:

    Questions presented:

    Whether Congress can evade its unambiguous statutory promise to pay health insurers for losses already incurred simply by enacting appropriations riders restricting the sources of funds available to satisfy the government's obligation.[9]


    The petitioner, Land of Lincoln Mutual Health Insurance Company, presented the following questions to the court:

    Questions presented:

    Whether a temporary cap on appropriations availability from certain specified funding sources may be construed, based on its legislative history, to abrogate retroactively the Government's payment obligations under a money-mandating statute, for parties that have already performed their part of the bargain under the statute[10]

    Outcome

    In an 8-1 opinion, the court reversed the judgment of the United States Court of Appeals for the Federal Circuit, holding that the risk corridors statute created a government obligation to pay insurers the full amount set out in §1342's formula, Congress did not impliedly repeal the obligation through its appropriations riders, and petitioners properly relied on the Tucker Act to sue for damages in the Court of Federal Claims.[2]

    Justice Sonia Sotomayor delivered the opinion of the court, joined by Chief Justice John Roberts, and Associate Justices Ruth Bader Ginsburg, Stephen Breyer, Elena Kagan, and Brett Kavanaugh. Justices Clarence Thomas and Neil Gorsuch joined to all but Part III-C. Justice Samuel Alito filed a dissenting opinion.

    Opinion

    In her opinion, Justice Sonia Sotomayor wrote:[2]

    “ The Patient Protection and Affordable Care Act expanded healthcare coverage to many who did not have or could not afford it. The Affordable Care Act did this by, among other things, providing tax credits to help people buy insurance and establishing online marketplaces where insurers could sell plans. To encourage insurers to enter those marketplaces, the Act created several programs to defray the carriers' costs and cabin their risks.


    Among these initiatives was the "Risk Corridors" program, a temporary framework meant to compensate insurers for unexpectedly unprofitable plans during the marketplaces’ first three years. The since-expired Risk Corridors statute, §1342, set a formula for calculating payments under the program: If an insurance plan loses a certain amount of money, the Federal Government "shall pay" the plan; if the plan makes a certain amount of money, the plan“shall pay” the Government. See §1342, 124 Stat. 211--212 (codified at 42 U.S.C. §18062). Some plans made money and paid the Government. Many suffered losses and sought reimbursement. The Government, however, did not pay.

    These cases are about whether petitioners—insurers who claim losses under the Risk Corridors program—have a right to payment under §1342 and a damages remedy for the unpaid amounts. We hold that they do. We conclude that §1342 of the Affordable Care Act established a money-mandating obligation, that Congress did not repeal this obligation, and that petitioners may sue the Government for damages in the Court of Federal Claims.[7]

    		”

    Dissenting opinion

    Justice Samuel Alito filed a dissenting opinion.

    In his dissent, Justice Alito wrote:[2]

    “ Twice this Term, we have made the point that we have basically gotten out of the business of recognizing private rights of action not expressly created by Congress. ...


    Today, however, the Court infers a private right of action that has the effect of providing a massive bailout for insurance companies that took a calculated risk and lost. These companies chose to participate in an Affordable Care Act program that they thought would be profitable. I assume for the sake of argument that the Court is correct in holding that §1342 of the Affordable Care Act created an obligation that was not rescinded by subsequent appropriations riders. Thus, for present purposes, I do not dispute the thrust of the analysis in Parts I–III of the opinion of the Court. ...

    Under the Court's decision, billions of taxpayer dollars will be turned over to insurance companies that bet unsuccessfully on the success of the program in question. This money will have to be paid even though Congress has pointedly declined to appropriate money for that purpose. ...

    Despite its importance, the legitimacy of inferring a right of action under §1342 has not received much attention in these cases. The Federal Circuit addressed the question in passing in a footnote, 892 F. 3d 1311, 1320, n. 2 (2018), and in this Court, the briefing and argument focused primarily on other issues. No attempt was made to reconcile our approach to inferring rights of action in Tucker Act cases with our broader jurisprudence.

    I am unwilling to endorse the Court's holding in these cases without understanding how the "money-mandating" test on which the Court relies fits into our general approach to the recognition of implied rights of action. Because the briefing and argument that we have received have not fully addressed this important question, I would request supplemental briefing and set the cases for re-argument next Term.

    For these reasons, I respectfully dissent.[7]

    		”

    Text of the opinion

    Read the full opinion here.

    Oral argument

    Audio

    Audio of oral argument:[11]



    Transcript

    See also

    External links

    Footnotes

    1. ↑ Moda Health Plan Inc. v. United States and Land of Lincoln Mutual Health Insurance Co. v. United States also came on a writ of certiorari to the United States Court of Appeals for the Federal Circuit. The docket numbers are 18-1028 and 18-1038, respectively.
    2. ↑ 2.0 2.1 2.2 2.3 Supreme Court of the United States, Maine Community Health Options v. United States, decided April 27, 2020
    3. ↑ 3.0 3.1 Supreme Court of the United States, Maine Community Health Options v. United States: "Questions presented," accessed June 27, 2019
    4. ↑ Supreme Court of the United States, "Order list," June 24, 2019
    5. ↑ 5.0 5.1 5.2 5.3 5.4 Supreme Court of the United States, Maine Community Health Options v. United States: "Petition for a writ of certiorari," accessed June 27, 2019
    6. ↑ Supreme Court of the United States, Moda Health Plan Inc. v. United States: "Petition for a writ of certiorari," accessed June 27, 2019
    7. ↑ 7.0 7.1 7.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    8. ↑ Supreme Court of the United States, Land of Lincoln Mutual Health Insurance Co. v. United States: "Petition for a writ of certiorari," accessed June 27, 2019
    9. ↑ Supreme Court of the United States, Moda Health Plan, Inc. v. United States: "Questions presented," accessed June 27, 2019
    10. ↑ Supreme Court of the United States, Land of Lincoln Mutual Health v. United States: "Questions presented," accessed June 27, 2019
    11. ↑ Supreme Court of the United States, "Oral Argument - Audio," accessed December 16, 2019
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