Paul Clement Paul Clement,representing four insurance companies, argued that theappropriation riders did not repeal the program and left intact a"clear and enforceable promise required to make the Affordable CareAct work." (Credit: Diego M. Radzinschi/ ALM)

The U.S. Justice Department on Tuesday faced a skeptical U.S.Supreme Court over arguments that the governmenthad no obligation to pay $12 billion in losses incurred byinsurance companies that agreed to participate in a federal programto provide health insurance for high risk individuals through theAffordable Care Act.

The Affordable Care Act established a "risk corridors" programstating that the government "shall pay" insurers a portion of theirlosses for three years beginning in 2014 if their costs were higherthan anticipated. Insurers were obligated to pay a portion of anysavings into the program if costs were lower than expected.

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Marcia Coyle

Marcia Coyle, based in Washington, covers the U.S. Supreme Court. Contact her at [email protected]. On Twitter: @MarciaCoyle