As ObamaCare flounders, “risk corridors” again take center stage
In the wake of rising costs for health insurance in the ObamaCare market, consumers are simply opting out, and this is taking its toll on ObamaCare’s viability not only for consumers but for health insurers. So much so that United Health, one of the nation’s largest health insurers, acknowledged this week that it is considering leaving the ObamaCare market.
The Obama administration responded by “quietly” promising to bail out health insurers in yet another attempt to save his clearly ineffective and flailing signature law. The debate centers, once again, on the so-called “risk corridors” built into ObamaCare.
Thursday, just hours after giant insurer UnitedHealthcare said it’s losing money selling ObamaCare plans and will likely exit the health exchanges next year, the Obama administration quietly promised to bail out insurers for their losses — using your money.
. . . . On Thursday, the administration tried to calm insurers, sending them a written memo full of promises. Obama’s Department of Health and Human Services vowed to go to Congress for full funding to reimburse insurers for their losses.
At issue is the Affordable Care Act’s so-called “risk corridor” program. Profitable insurers are supposed to pay into a fund every year to help unprofitable insurers. But with nearly all insurers losing money on ObamaCare, there’s not enough money in the pot. Insurers requested $2.9 billion to offset their 2014 losses, and were told they would get only 13 cents on the dollar, because the pot is so empty.
The moneys used to bail out the insurance industry are supposed to come from money paid in by ObamaCare users; however, there is not enough money to cover losses.
The industry lobbying group America’s Health Insurance Plans — which happens to be helmed by Marilyn Tavenner, who previously oversaw the implementation of Obamacare as head of the Centers for Medicare and Medicaid Services — is aggressively fighting for more money.
In a statement issued Thursday, the same day that the nation’s largest insurer, UnitedHealth announced it may exit Obamacare due to mounting losses, Tavenner said, “We’ve been very clear with the administration about the serious challenges facing consumers and health plans in this Exchange market. Most recently, nearly 800,000 Americans have faced coverage disruptions as a result of the significant and unexpected shortfall with the risk corridors program. When health plans cannot rely on the government to meet its obligations, individuals and families are harmed as a result. The administration must act to ensure this program works as intended and consumers are protected.”
In an effort to reassure the industry, CMS, the HHS agency Tavenner previously led, issued guidance reiterating that HHS would use money collected from insurers in 2015 and possibly 2016 to make up the $2.5 billion shortfall that exists in 2014.
But what happens if there still isn’t enough money, and after 2016, the program is taking in less than the money sought by insurers?
HHS said it, would “explore other sources of funding for risk corridors payments, subject to the availability of appropriations. This includes working with Congress on the necessary funding for outstanding risk corridors payments.”
One of the arguments against repealing ObamaCare is that it would disrupt the health insurance of millions of Americans; however (and setting aside the millions of canceled policies that Americans endured and will endure as the rest of ObamaCare rolls out), all of these co-op closures, health insurers leaving the ObamaCare market, and discontinued policies/sky-high premiums, deductibles, and co-pays are equally—if not more—disruptive to millions of Americans . . . and with no end in sight.DONATE
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