Legislative Bulletin: Updated Summary of Obamacare “Stability” Legislation

On Monday, Sen. Lamar Alexander (R-TN) and others introduced their latest version of an Obamacare “stability” bill. In general, the bill would appropriate more than $60 billion in funds to insurance companies, propping up and entrenching Obamacare rather than repealing it.

Also on Monday, the Congressional Budget Office released its analysis of the updated legislation. In CBO’s estimate, the bill would increase the deficit by $19.1 billion, while marginally increasing the number of insured Americans (by fewer than 500,000 per year).


Stability Fund
: Provides $500 million in funding for fiscal year 2018, and $10 billion in funding for each of fiscal years 2019, 2020, and 2021, for invisible high-risk pools and reinsurance payments. The $500 million this year would provide administrative assistance to states to establish such programs, with the $10 billion in each of the following three years maintaining them.

Grants the secretary of Health and Human Services (HHS), in consultation with the National Association of Insurance Commissioners, the authority to allocate the funds to states—which some conservatives may be concerned gives federal bureaucrats authority to spend $30.5 billion wherever they choose.

Includes a provision requiring a federal fallback for 2019 (and only 2019) in states that choose not to establish their own reinsurance or invisible high-risk program. Moreover, these federal fallback dollars must be used “for market stabilization payments to issuers.” Some conservatives may be concerned that this provision—which, like the rest of the $30 billion in “stability funds,” did not appear in the original Alexander-Murray legislation—undermines state flexibility, by effectively forcing states to bail out insurers, whether they want to or not.

Cost-Sharing Reduction Payments: The bill appropriates roughly $30-35 billion in cost-sharing reduction (CSR) payments to insurers, which subsidizes their provision of discounts on deductibles and co-payments to certain low-income individuals enrolled on insurance exchanges.

Last October, President Trump announced he would halt the payments to insurers, concluding the administration did not have authority to do so under the Constitution. As a result, the bill includes an explicit appropriation, totaling roughly $3-4 billion for the final quarter of 2017, and $9-10 billion for each of years 2019, 2020, and 2021, based on CBO spending estimates. This language represents a change from the original Alexander-Murray bill, which appropriated payments for 2018 and 2019 only.

For 2018, the bill appropriates CSRs only for 1) states choosing the Basic Health plan option (which gives states a percentage of Obamacare subsidies as a block grant to cover low-income individuals) and 2) insurers for which HHS determines, in conjunction with state insurance commissioners, that the insurer assumed the payment of CSRs when setting rates for the 2018 plan year. This language represents a change from the original Alexander-Murray bill, which set up a complicated system of rebates that would have allowed insurers potentially to pocket billions of dollars by retaining “extra” CSR payments for 2018.

Some conservatives may be concerned that, because insurers understood for well over a year that a new administration could terminate these payments in 2017, the agreement would effectively subsidize their flawed assumptions. Some conservatives may be concerned that action to continue the flow of payments would solidify the principle that Obamacare, and therefore insurers, are “too big to fail,” which could only encourage further risky behavior by insurers in the future.

Hyde Amendment: With respect to the issue of taxpayer dollars subsidizing federal insurance plans covering abortion, the bill does not apply the Hyde Amendment protections retrospectively to the 2017 CSR payments, or to the (current) 2018 plan year. With respect to 2019 through 2021, the bill prohibits federal funding of abortions, except in the case of rape, incest, or to save the life of the mother. However, the bill does allow states to use state-only dollars to fund other abortions, as many state Medicaid managed care plans do currently.

According to the pro-abortion Guttmacher Institute, with respect to coverage of abortions in state Medicaid plans:

  • 32 states and the District of Columbia follow the federal Hyde Amendment standard, funding abortion only in the cases of rape, incest, or to save the life of the mother;
  • One state provides abortion only in the case of life endangerment; and
  • 17 states provide coverage for most abortions—five voluntarily, and 12 by court order.

State Waiver Processes: The bill would streamline the process for approving state innovation waivers, authorized by Section 1332 of Obamacare. Those waivers allow states to receive their state’s exchange funding as a block grant, and exempt themselves from the individual mandate, employer mandate, and some (but not all) of Obamacare’s insurance regulations.

Specifically, the bill would:

  • Extend the waivers’ duration, from five years to six, with unlimited renewals possible;
  • Prohibit HHS from terminating waivers during their duration (including any renewal periods), unless “the state materially failed to comply with the terms and conditions of the waiver”;
  • Require HHS to release guidance to states within 60 days of enactment regarding waivers, including model language for waivers—a change from the 30 days included in the original Alexander-Murray bill;
  • Shorten the time for HHS to consider waivers from 180 days to 120—a change from 90 days in the original Alexander-Murray bill;
  • Allow a 45-day review for 1) waivers currently pending; 2) waivers for areas “the Secretary determines are at risk for excessive premium increases or having no health plans offered in the applicable health insurance market for the current or following plan year”; 3) waivers that are “the same or substantially similar” to waivers previously approved for another state; and 4) waivers related to invisible high-risk pools or reinsurance, as discussed above. These waivers would initially apply for no more than three years, with an extension possible for a full six-year term;
  • Allow governors to apply for waivers based on their certification of authority, rather than requiring states to pass a law authorizing state actions under the waiver—a move that some conservatives may be concerned could allow state chief executives to act unilaterally, including by exiting a successful waiver on a governor’s order.

State Waiver Substance: On the substance of innovation waivers, the bill would rescind regulatory guidance the Obama administration issued in December 2015. Among other actions, that guidance prevented states from using savings from an Obamacare/exchange waiver to offset higher costs to Medicaid, and vice versa.

While supporting the concept of greater flexibility for states, some conservatives may note that, as this guidance was not enacted pursuant to notice-and-comment, the Trump administration can revoke it at any time—indeed, should have revoked it last year. Additionally, the bill amends, but does not repeal, the “guardrails” for state innovation waivers. Under current law, Section 1332 waivers must:

  • “Provide coverage that is at least as comprehensive as” Obamacare coverage;
  • “Provide coverage and cost-sharing protections against excessive out-of-pocket spending that are at least as affordable” as Obamacare coverage;
  • “Provide coverage to at least a comparable number of [a state’s] residents” as under Obamacare; and
  • “Not increase the federal deficit.”

Some conservatives have previously criticized these provisions as insufficiently flexible to allow for conservative health reforms like Health Savings Accounts and other consumer-driven options.

The bill allows states to provide coverage “of comparable affordability, including for low-income individuals, individuals with serious health needs, and other vulnerable populations” rather than the current language in the second bullet above. It also clarifies that deficit and budget neutrality will operate over the lifetime of the waiver, and that state innovation waivers under Obamacare “shall not be construed to affect any waiver processes or standards” under the Medicare or Medicaid statutes for purposes of determining the Obamacare waiver’s deficit neutrality.

The bill also makes adjustments to the “pass-through” language allowing states to receive their exchange funding via a block grant. For instance, the bill adds language allowing states to receive any funding for the Basic Health Program—a program states can establish for households with incomes of between 138-200 percent of the federal poverty level—via the block grant.

Some conservatives may view the “comparable affordability” change as a distinction without a difference, as it still explicitly links affordability to Obamacare’s rich benefit package. Some conservatives may therefore view the purported “concessions” on the December 2015 guidance, and on “comparable affordability” as inconsequential in nature, and insignificant given the significant concessions to liberals included elsewhere in the proposed legislative package.

Catastrophic Plans: The bill would allow all individuals to purchase “catastrophic” health plans, beginning in 2019. The legislation would also require insurers to keep those plans in a single risk pool with other Obamacare plans—a change from current law.

Catastrophic plans—currently only available to individuals under 30, individuals without an “affordable” health plan in their area, or individuals subject to a hardship exemption from the individual mandate—provide no coverage below Obamacare’s limit on out-of-pocket spending, but for “coverage of at least three primary care visits.” Catastrophic plans are also currently subject to Obamacare’s essential health benefits requirements.

Outreach Funding: The bill requires HHS to obligate $105.8 million in exchange user fees to states for “enrollment and outreach activities” for the 2019 and 2020 plan years—a change from the original legislation, which focused on the 2018 and 2019 plan years. Currently, the federal exchange (healthcare.gov) assesses a user fee of 3.5 percent of premiums on insurers, who ultimately pass these fees on to consumers.

In a rule released in December 2016, the outgoing Obama administration admitted that the exchange is “gaining economies of scale from functions with fixed costs,” in part because maintaining the exchange costs less per year than creating one did in 2013-14. However, the Obama administration rejected any attempt to lower those fees, instead deciding to spend them on outreach efforts. The agreement would re-direct portions of the fees to states for enrollment outreach.

Some conservatives may be concerned that this provision would create a new entitlement for states to outreach dollars. Moreover, some conservatives may object to this re-direction of funds that ultimately come from consumers towards more government spending. Some conservatives may support taking steps to reduce the user fees—thus lowering premiums, the purported intention of this “stabilization” measure—rather than re-directing them toward more government spending, as the agreement proposes.

The bill also requires a series of biweekly reports from HHS on metrics like call center volume, website visits, etc., during the 2019 and 2020 open enrollment periods, followed by after-action reports regarding outreach and advertising. Some conservatives may view these myriad requirements first as micro-management of the executive, and second as buying into the liberal narrative that the Trump administration is “sabotaging” Obamacare, by requiring minute oversight of the executive’s implementation of the law.

Cross-State Purchasing: Requires HHS to issue regulations (in consultation with the National Association of Insurance Commissioners) within one year regarding health care choice compacts under Obamacare. Such compacts would allow individuals to purchase coverage across state lines.

However, because states can already establish health care compacts amongst themselves, and because Obamacare’s regulatory mandates would still apply to any such coverage purchased through said compacts, some conservatives may view such language as insufficient and not adding to consumers’ affordable coverage options.

Consumer Notification: Requires states that allow the sale of short-term, limited duration health coverage to disclose to consumers that such plans differ from “Obamacare-approved” qualified health plans. Note that this provision does not codify the administration’s proposed regulations regarding short-term health coverage; a future Democratic administration could (and likely will) easily re-write such regulations again to eliminate the sale of short-term plans, as the Obama administration did in 2016.

CBO Analysis of the Legislation

As noted above, CBO believes the legislation would increase the deficit by $19.1 billion, while increasing the number of insured Americans marginally. In general, while CBO believed that changes to Obamacare’s state waivers program would increase the number of states applying for waivers, they would not have a net budgetary impact.

However, the bill does include one particular change to Obamacare Section 1332 waivers allowing existing waiver recipients to request recalculation of their funding formula. According to CBO, only Minnesota qualifies under the statutory definition, and could receive $359 million in additional funding between 2018 and 2022. Some conservatives may be concerned that this provision represents a legislative earmark that by definition can only affect one state.

With respect to the invisible high-risk pools and reinsurance, CBO believes the provisions would raise spending by a net of $26.5 billion, offset by higher revenues of $7 billion. The budget office estimated that the entire country would be covered by the federal fallback option in 2019, because “it would be difficult for other states [that do not have waivers currently] to establish a state-based program in time to affect premiums.”

For 2020 and 2021, CBO believes that 60 and 80 percent of the country, respectively, would be covered by state waivers; “the remainder of the population in those years would be without a federally-funded reinsurance program or invisible high-risk pool.” The $7 billion in offsetting savings referenced in CBO’s score comes from lower premiums, and thus lower spending on federal premium subsidies. In 2019, CBO believes “about 60 percent of the federal cost for the default federal reinsurance program would be offset by other sources of savings.”

CBO believes that, under the bill, premiums would be 10 percent lower in 2019, and 20 percent lower in 2020 and 2021, compared to current law. Some conservatives may note that lower premiums relative to current law does not equate to lower premiums relative to 2018 levels. Particularly because CBO expects elimination of the individual mandate tax will raise premiums by 10 percent in 2019, many conservatives may doubt that premiums will go down in absolute terms, notwithstanding the sizable spending on insurer subsidies under the bill.

CBO noted that premium changes would largely affect unsubsidized individuals—i.e., families with incomes more than four times the federal poverty level ($100,400 for a family of four in 2018)—a small portion of whom would sign up for coverage as a result of the reductions. However, “in states that did not apply for a waiver, premiums would be the same under current law as under the legislation starting in 2020.”

Moreover, even in states with a reinsurance waiver, CBO believes that insurers will “tend to set premiums conservatively to hedge against uncertainty” regarding the reinsurance programs—meaning that CBO “expect[s] that total premiums would not be reduced by the entire amount of available federal funding.”

As noted in prior posts, CBO is required by law to assume full funding of entitlement spending, including cost-sharing reductions. Therefore, the official score of the bill included no net budget impact for the CSR appropriation. However, Alexander received a supplemental letter from CBO indicating that, compared to a scenario where the federal government did not make CSR payments, appropriating funds for CSRs would result in a notional deficit reduction of $29 billion.

The notional deficit reduction arises because, in the absence of CSR payments, insurers would “load” the cost of reducing cost-sharing on to health insurance premiums—thus raising premium subsidies for those who qualify for them. CBO believes these higher subsidies would entice more families with incomes between two and four times the federal poverty definition ($50,200-$100,400 for a family of four in 2018) to sign up for coverage. Compared to a “no-CSR” baseline, appropriating funds for CSRs, as the bill would do, would reduce spending on premium subsidies, but it would also increase the number of uninsured by 500,000-1,000,000, as some families receiving lower subsidies would drop coverage.

Lastly, the expanded sale of catastrophic plans, coupled with provisions including those plans in a single risk pool, would slightly improve the health of the overall population purchasing Obamacare coverage. While individuals cannot receive federal premium subsidies for catastrophic coverage, enticing more healthy individuals to sign up for coverage will improve the exchanges’ overall risk pool slightly, lowering federal spending on those who do qualify for exchange subsidies by $849 million.

This post was originally published at The Federalist.

“Problem Solvers'” Obamacare Solution: Single Payer

On Monday, a bipartisan Problem Solvers Caucus in the House released their list of “solutions” regarding Obamacare. Developed over the past several months, the list can easily be summed up in a single phrase: Single payer.

The lawmakers didn’t come out and say as much, of course, but that would be the net result. In funding more bailout spending for insurers, the proposal clearly states that Obamacare is “too big to fail”—that no amount of taxpayer funding is too great to keep insurers offering coverage on the health exchanges. Enacting that government backstop would create a de facto single-payer health-care system—only with many more well-priced insurer lobbyists around to demand more crony capitalist payments from government to their industry.

Cost-Sharing Reductions

In this scenario, how likely would you be just to give the burglar your property, so he could have the resources he needs? Probably not very. On the one hand, that would solve the burglar’s immediate problem, but the burglar broke the law—and ignoring that offense will only encourage future law-breaking.

That’s essentially the scenario facing Obamacare’s cost-sharing reduction payments, meant to subsidize discounted co-payments and deductibles for certain low-income individuals. Obamacare didn’t include an actual appropriation for the payments, so Barack Obama just made one up that didn’t exist. In essence, he stole both the constitutional spending power of Congress and taxpayer funds—recall that spending money without an appropriation is not just a civil, but a criminal, offense—to get Obamacare started.

Yet Congress seems far more worried about propping up Obamacare than holding President Obama to account—focusing solely on the outcomes to individuals, while caring not a whit for the effects on the rule of law. The Problem Solvers Caucus plan includes cost-sharing reduction payments with no accountability for the Obama Administration’s flagrant violation of the Constitution.

Reinsurance

The Problem Solvers Caucus plan also includes “stability fund” dollars designed to subsidize insurers for covering high-cost Obamacare enrollees. But here again, the proposal throws good money after bad at insurers, creating a new government program after non-partisan auditors concluded that insurers illegally received billions of dollars from the last federal bailout.

Last September, the Government Accountability Office (GAO) concluded that the Obama administration illegally funneled billions of dollars in reinsurance funds to health insurers rather than the U.S. Treasury. After taking in “assessments” (read: taxes) from employers, the text of Obamacare itself requires the government to repay $5 billion to the Treasury (to offset the cost of another Obamacare program) before paying health insurers reinsurance funds.

But when employer “assessments” generated less money than originally contemplated, the Obama administration put insurers’ needs for bailout funds over the law—and taxpayers’ interests. GAO found the Obama administration’s actions violated the law, costing taxpayers billions in the process.

Throwing Money at Problems

In general, the Problem Solvers Caucus attempts to solve problems by throwing money at them, by paying tens of billions of dollars (at minimum) to insurers. But as Margaret Thatcher pointed out four decades ago, socialism always runs out of other people’s money—a problem that the proposal wouldn’t solve, but worsen.

The Problem Solvers Caucus proposal amounts to little more than an Obamacare TARP—that’s Turning Against Repeal Promises (or Taking Away Repeal Promises, if you prefer). In abandoning the repeal cause, and setting up a federal backstop for the entire health-care system, the plan would create a de facto single-payer health-care system. Bernie Sanders would be proud.

This post was originally published at The Federalist.

Schumer Admits Obama Violated the Constitution

Last week, one of Washington’s leading Democrats made what should be considered a stunning admission, yet few in the media bothered to notice, or care. In response to comments from Senate Majority Leader Mitch McConnell (R-KY) about a potential bailout of Obamacare insurers, Minority Leader Chuck Schumer (D-NY) said: “Democrats are eager to work with Republicans to stabilize the markets and improve [Obamacare]. At the top of the list should be ensuring cost-sharing payments are permanent, which will protect health care for millions.”

Schumer’s statement contradicts the Obama administration, which argued in federal court that the cost-sharing reductions are already permanent. It’s also an implicit admission that the Obama administration violated both the U.S. Constitution and federal criminal statutes by spending funds without an appropriation.

Not wanting to be bound by such niceties as the rule of law, the Obama administration started making the payments to insurers anyway, claiming the “text and structure” of Obamacare allowed them to do so. The House of Representatives sued, claiming a violation of its constitutional “power of the purse,” and last May, Judge Rosemary Collyer agreed, ruling that the administration violated the Constitution.

Schumer Admits Constitutional Violation

Schumer’s statement last Thursday stands out because the Obama administration and House Minority Leader Nancy Pelosi (D-CA) have claimed, both in court and elsewhere, that Obamacare made a permanent appropriation for the cost-sharing payments. The law did no such thing, and a federal district court judge so ruled, but they attempted to argue that it did.

By conceding that Obamacare lacks a permanent appropriation for cost-sharing reductions, Schumer’s admission raises some interesting questions. The Obama administration requested an explicit appropriation for the cost-sharing reduction payments, a request Congress promptly denied. If there isn’t a permanent appropriation for cost-sharing payments in Obamacare—as Schumer admitted—then the Obama administration spent money without an appropriation.

The Anti-Deficiency Act includes not just civil, but criminal, penalties: “An officer or employee of the United States Government or of the District of Columbia government knowingly and willfully violating [the Act] shall be fined not more than $5,000, imprisoned for not more than 2 years, or both.”

By calling on Congress to “ensure” permanent cost-sharing reductions, Schumer has essentially admitted that President Obama violated the Constitution, and members of his administration may have violated federal criminal statutes by spending money without an appropriation. This prompts one other obvious question: When will Schumer endorse a special counsel to investigate these matters?

Don’t Endorse Law-Breaking

In deciding to pay the cost-sharing subsidies without an appropriation, the Obama administration and its allies have endorsed a strategy of ends justifying means: They wanted to provide health insurance to more Americans, therefore it was acceptable to violate the Constitution. And if the administration violated the Constitution long enough, and on a big enough scale, they could change the law to meet their will. Now that a federal court has ruled that President Obama did in fact violate the Constitution, that’s exactly what Pelosi and Schumer want to do: Change the law to accommodate the Obama administration’s law-breaking.

Only after those weighty issues have been examined and adjudicated fully should Congress debate whether to appropriate funds for the cost-sharing reductions. To do otherwise would undermine the Constitution that members of Congress vowed to uphold, and further encourage the kind of flagrant law-breaking seen in the Obama administration.

This post was originally published at The Federalist.

How to Stop Insurer Bailouts

In the coming decade, actions set in motion by the Obama administration could cost the American taxpayer over $170 billion in publicly funded health-insurance-company bailouts — a scandal I described in detail in these pages last week. Fortunately for taxpayers, however, a future administration could shut off the gushing taps of bailout dollars that President Obama has turned on. Because the bailouts in large part revolve around unilateral administration actions — decisions solely made by the executive, without even the notice-and-comment process used in normal rulemaking — the next administration could reverse those actions almost as quickly as they were introduced.

By taking the steps below, a Republican administration could preserve taxpayer funds — and restore the separation of powers this administration has so badly damaged.

RISK CORRIDORS

One of two transitional programs for Obamacare insurers, risk corridors were designed to provide stability in the law’s early years — insurers with large profits would pay in some of their gains to reduce shortfalls by carriers with large losses. However, because insurers have lost money hand-over-fist on Obamacare exchanges, claims by loss-making insurers seeking payments have greatly exceeded receipts taken in by profit-making insurers. Congress has thus far prevented the Centers for Medicare and Medicaid Services (CMS) from using taxpayer funds to bail out the risk corridors, but insurers are taking legal action seeking unpaid risk-corridor funds as a result.

Action: Revoke the Administration Memo Declaring a Unilateral Bailout: In November, CMS issued a short memo noting that, in 2014, insurers requested $2.87 billion in risk-corridor payments, but because other insurers only paid in $362 million to risk corridors, the administration could only pay 12.6 percent of 2014 payment requests. The memo stated that the $2.5 billion in unpaid payments represent an “obligation of the United States Government for which full payment is required.”

The memo conceded that Congress had provided no appropriation for the $2.5 billion in risk-corridor shortfalls — indeed, Congress had specifically enacted language prohibiting CMS from spending additional taxpayer funds on risk-corridor payments. CMS had no authority to issue such a memo — and the next administration should revoke it.

Action: Refuse to Settle Risk-Corridor Lawsuits — and Refuse to Pay Claims: Insurers have filed several lawsuits seeking to collect their unpaid risk-corridor funds — lawsuits that the Obama administration will be inclined to settle. Congress prohibited CMS from using taxpayer funds to pay risk-corridor claims — but a legal settlement would be paid from the Judgment Fund of the Treasury, allowing the administration to circumvent the appropriations restrictions.

The Obama administration may, in its final days after November’s elections, attempt to settle the insurer lawsuits by paying risk-corridor claims from the Judgment Fund. Such an action would contradict opinions of the Congressional Research Service (CRS) and the Government Accountability Office (GAO). Both organizations have stated their belief that the Judgment Fund cannot be used to spend money on accounts and programs where Congress itself has declined to appropriate funds. Particularly given the views of these non-partisan legal experts, federal judges can, and should, look skeptically upon, and even overturn entirely, any conspiracy by the Obama administration and insurers to create a backdoor bailout without Congress’s explicit consent in the form of an appropriation.

The next administration should fight these insurer lawsuits tooth-and-nail, refusing to either settle the lawsuits or to use the Judgment Fund to pay any claims — unless and until Congress explicitly appropriates funds for that purpose. Under our Constitution, the power of the purse lies solely with Congress, not with unelected bureaucrats who believe they can dispense billions of dollars in taxpayer money to their crony-capitalist colleagues at will.

Potential Savings to Taxpayers: Insurers submitted $2.5 billion in unpaid risk-corridor claims for 2014. Given continued insurer losses in 2015 and 2016, a conservative estimate would suggest a total of $7.5 billion in unpaid claims for each of 2014, 2015, and 2016. Actions by a new administration could save taxpayers from this bailout totaling billions — possibly tens of billions — of dollars.

REINSURANCE

Reinsurance, the second program intended to ease the transition to Obamacare, would, according to the text of the law, impose “fees” on all employer-provided plans from 2014 to 2016. The funds were designed to 1) repay the Treasury for the cost of another reinsurance program in place from 2010 to 2013, and 2) subsidize insurers selling Obamacare-compliant individual plans with high-cost patients.

Action: Reclaim Funds for the Treasury: While the text of Obamacare explicitly states the Obama administration should prioritize repaying the Treasury over repaying insurers, the administration has done precisely the opposite — putting payments to insurers ahead of repayments to taxpayers. The non-partisan experts at CRS have called the Obama administration’s actions a clear violation of the text of the law.

The next administration can and should limit this insurer bailout by reorienting its priorities in line with both the law and basic common sense — taxpayers deserve priority before insurers. It could also sue insurers to recoup bailout funds dispensed in error because of the Obama administration’s reckless disregard for the law.

Potential Savings to Taxpayers: While insurers appear likely to receive the full $20 billion in reinsurance payments provided for under the law from 2014 to 2016, the Treasury is set to receive far less than the $5 billion it was promised under the statute. Reorienting the reinsurance priorities to put taxpayers before insurers will likely save the public billions.

COST-SHARING SUBSIDIES

Obamacare requires insurers to provide reduced cost sharing — that is, lower deductibles and co-payments — to households with incomes under 250 percent of the federal poverty level. But the text of the law nowhere includes an explicit appropriation to subsidize the insurer-provided discounts. The Obama administration, refusing to be bothered by such trifling inconveniences as the plain text of a statute, will have already paid out $13.9 billion by the end of this fiscal year (September 30). A future administration could turn the bailout taps off within days of taking office.

Action: Turn Off the Bailout Taps Immediately: As noted in the deposition of an IRS employee recently released by the House Ways and Means Committee, the Obama administration decided to turn on these bailout taps despite the plain text of the law — and without undertaking any public notice-and-comment process. A future administration could turn the bailout taps off in a similar fashion within days of taking office.

Action: Settle the House Lawsuit: On May 12, in United States District Court, Judge Rosemary Collyer agreed with the House of Representatives in U.S. House of Representatives v. Burwell, an important constitutional case related to the cost-sharing subsidies. The House argued, and Judge Collyer agreed, that the Obama administration’s payments to insurers violated the Constitution — which, by prohibiting any payment without an explicit appropriation, gives Congress, and only Congress, the “power of the purse.”

By settling the House lawsuit, the next administration would provide another level of insurance that the bailout taps to insurers could not be re-started. The House’s suit requests a permanent injunction prohibiting the Treasury Department and the Department of Health and Human Services from spending any taxpayer funds on cost-sharing subsidies to insurers unless and until Congress provides an explicit appropriation. If the next administration agreed to such a measure by settling the House’s lawsuit in federal court, it would bind all future administrations to the same standard — restraining executive power and restoring the separation of powers.

Potential Savings to Taxpayers: The Congressional Budget Office estimates that cost-sharing subsidies will total $45 billion over the next four fiscal years — roughly the time span of the next administration — and $130 billion over a decade, meaning that a new administration could save taxpayers tens of billions, if not hundreds of billions, of dollars.

This series of actions from the next administration would save taxpayers more than $50 billion in total — $7.5 billion from risk corridors, up to $5 billion from reinsurance, and $45 billion in cost-sharing subsidies — and potentially triple that amount if the restrictions on cost-sharing subsidies become permanent.

Just as important, the next administration should also thoroughly investigate the actions taken by the Obama administration regarding these insurer bailouts for any hint of illegality. In the deposition released by the House Ways and Means Committee, the IRS’s chief risk officer noted “there was some risk to making these [cost-sharing subsidy] payments with respect to the . . . Anti-Deficiency Act,” which he recalled “has criminal penalties associated with it” for federal employees who spend money not appropriated by Congress. The chief risk officer noted that “we take [the Anti-Deficiency Act] very seriously.”

At minimum, the next administration should investigate just how seriously all Obama administration employees took the Anti-Deficiency Act, and whether they violated the law — not to mention the Constitution’s separation of powers — to shovel bailout funds to insurers. The IRS’s chief risk officer noted that then-attorney general Eric Holder and Treasury Secretary Jack Lew were personally involved in the decision to turn on the bailout taps for the cost-sharing subsidies. In addition to turning off those taps, a new administration should determine whether the Obama administration’s sweetheart deals for health insurers crossed the line from mere crony capitalism into criminal activity.

This post was originally published at National Review.