Legislation Would Halt HHS Cash Grab

The Honorable Ben Sasse
United States Senate 386A
Russell Senate Office Building
Washington, D.C.  20510
The Honorable Mark Walker
United States House of Representatives
312 Cannon House Office Building
Washington, D.C.  20515

Dear Senator Sasse and Representative Walker:

On behalf of the members of National Taxpayers Union (NTU), I write in support of the “Taxpayers Before Insurers Act,” S. 2803 and H.R. 5904 in the Senate and House respectively. This legislation would require the Department of Health and Human Services (HHS) to fulfill its $5 billion obligation to taxpayers, as mandated by the President’s health care law, or face a 50 percent reduction to its general operating budget.

One of several slush funds designed to mitigate transition costs of health insurers under the Patient Protection and Affordable Care Act (PPACA), the Transitional Reinsurance Program is required to pay $5 billion in taxes on employer-provided health insurance plans to the U.S. Treasury between 2014 and 2016. However, to date, HHS has agreed to send only $500 million to the Treasury. Instead, HHS has withheld the bulk of the revenue and disbursed it back to insurers. The nonpartisan Congressional Research Service found that this practice is a clear violation of the law, which unambiguously states that the funds be returned to the Treasury.

In prioritizing health insurance companies over taxpayers, HHS is not only violating the law, but also engaging in corporate welfare by bestowing favorable treatment on these powerful and well-connected companies in order to purchase their continued support for the failed PPACA. Even as we work to repeal PPACA, lawmakers should take every opportunity overturn policies that hurt taxpayers and consumers. To that end, NTU is pleased to support the “Taxpayers Before Insurers Act” and urges all legislators to work toward its swift enactment.

Brandon Arnold
Executive Vice President