Updated: June 24, 2019 / 9:46 a.m.
On Monday, the U.S. Supreme Court agreed to decide whether or not insurers would be granted to seek $12 billion from the federal government under a program that was set up by the Obamacare law aimed at encouraging them to offer medical coverage to previously uninsured Americans.
The justices will come together to hear an appeal by a group of insurers of a lower court’s ruling that Congress had suspended the government’s obligation to make such payments. The insurers have claimed that the decision would let the government pull a “bait-and-switch” and withhold money the companies were initially promised.
Insurers such as Moda Inc unit. Moda Health Plan Inc. and other insurers who have sued to try and persuade the Department of Health and Human Services (HHS) to make the payments have mentioned that the government was supposed to help them recuperate from early losses in which they endured after the 2010 passage of the Affordable Care Act under former Democratic President, Barack Obama.
The law, Obamacare, has allowed millions of Americans who previously had no medical coverage to obtain insurance.
Other insurers involved in the case include Maine Community Health Options, Blue Cross & Blue Shield of North Carolina, and Land of Lincoln Mutual Health Insurance Company.
If the Supreme Court decides to side with the insurers, the result could end with a significant one-time cash infusion for major companies such as Humana Inc, Anthem Inc and Centene Corp, according to a note by Evercore ISI. The insurers had previously written off the value of the payments.