HHS’s Offset of Insolvent Insurer’s Debt Violated Colo. Law, Federal Judge Rules

WASHINGTON, D.C. — A federal judge has ruled that Colorado law bars the U.S. Department of Health and Human Services from using money owed to an insolvent insurer to pay sums the insurer owes under the Patient Protection and Affordable Care Act’s (ACA) reinsurance and risk-adjustment programs.

In an Oct. 3 order, Judge Richard A. Hertling of the U.S. Court of Federal Claims ruled that the HHS’s offset violated Colorado’s insurance liquidation priority scheme by leap-frogging claimants with higher priority.

As part of the ACA, Congress created the Consumer Operated and Oriented Plan (CO-OP) program to ensure that states’ health-benefit …