“May 19--Highmark could soon be in good company in suing the federal government over Affordable Care Act reimbursement.
Other insurers have contacted Highmark since the Pittsburgh carrier filed a lawsuit Tuesday over reimbursement for losses incurred in providing coverage under the ACA, president and CEO David Holmberg said Wednesday. The companies are weighing their options to recoup billions of dollars they say are owed, he said.
"The losses were pretty significant," Mr. Holmberg said. "We ended up with the other companies standing here holding the bag. We saw no path forward."
Highmark, the fourth-largest Blues company and dominant provider of ACA coverage in Pennsylvania, Delaware and West Virginia, sued the federal government in the U.S. Court of Federal Claims for $223 million in losses sustained in 2014. In addition, Highmark says it will be owed another $500 million for losses on member claims by July when a government accounting is due.
Through a risk-sharing tool called risk corridors, the government had promised to pick up a share of the losses during the early years of the Affordable Care Act because insurers had little information about setting appropriate rates for a new population.
Instead, insurers received payment for only about 12.6 percent of the amount claimed -- $362 million for $2.87 billion in losses claimed by the carriers, according to Ursula Taylor, partner at the Chicago law firm of Butler Rubin Saltarelli & Boyd LLP.
"It is a holy mess," Ms. Taylor said. "This is a nationwide issue and it affects plans everywhere. Litigators are just beginning to pay attention to this."
Highmark's lawsuit is among a handful that have been filed nationwide over risk corridor reimbursement, but among only a few asserting that the government breached a contract with insurers. Other challenges have focused on the wording of the ACA, which was enacted in 2010.” - Highmark Lawsuit Could Prompt Other Insurers To Recoup ACA Losses, insurancenewsnet.com [via Pittsburgh Post-Gazette], 05/19/2016
Link to the entire article appears below:
http://insurancenewsnet.com/oarticle/highmark-affordable-care-act-suit-could-prompt-copycats
“Today, Democrats in Congress and the Obama administration are desperate to do something you may find surprising: give the insurance companies more than about $2.5 billion in bail out money.
That’s not a misprint. They want to take tax money from people who already think their premiums are too high and their coverage too skimpy and give it to the very “villains” they were excoriating only a few years ago.
Here’s the back story. Under a program called “risk corridor” insurance, the federal government pledged to redistribute money from insurers who made profits to insurers who incurred losses for a period of several years. The reason: the insurance industry was so uncertain about the outcome of the (Obamacare) health insurance exchanges that they insisted on a backup mechanism to protect themselves.
Yet last year’s appropriations bill, largely at the insistence of Sen. Marco Rubio, requires that the risk corridor payments be revenue neutral. In other words, any payment of funds to an insurance company suffering from a deficit must come from insurance companies who earned a profit. There can be no net transfer of taxpayer funds to the industry.
The problem is that in 2014 most of the carriers lost, and lost big. Blue Cross Blue Shield of Texas, for example, lost almost $400 million. United Healthcare, the nation’s largest private insurer announced the other day that it may pull out of the individual insurance company market altogether in 2017. For the coming year United Healthcare has announced that in most states it is ending all advertising and ceasing all broker commissions for plans sold in the Obamacare exchanges. Cigna just announced that it may leave the market as well.” - The Biggest Threat To Obamacare Is Already Written Into Law: No Insurance Industry Bailouts, forbes.com, 12/10/2016
Link to the entire article appears below:
http://www.forbes.com/sites/johngoodman/2015/12/10/the-biggest-threat-to-obamacare-is-already-written-into-law-no-insurance-industry-bailouts/#2715e4857a0b5f141b71712f
“House Republicans floated the idea Friday of demanding that the White House agree to end programs designed to assist insurance companies selling policies as part of the new health-care law in exchange for raising the debt ceiling for one year, according to a GOP lawmaker and senior leadership aides.”
“Under one scenario discussed Friday morning at the House GOP's annual policy retreat held on Maryland's Eastern shore, Republicans would agree to extend the debt limit for one year, but demand that there be "no bailouts for insurance companies under Obamacare," the lawmaker and aides said. House Majority Leader Eric I. Cantor (R-Va.) and House Budget Committee Chairman Paul Ryan (R-Wis.) described to colleagues how this scenario could play out and conservative lawmakers in the room seemed supportive of the idea, including Rep. Michele Bachmann (R-Minn.), who spoke up in support and offered to help whip up support for the plan among Republicans.”
“Concerns about a so-called "Obamacare bailout" have emerged in recent days, especially on conservative op-ed pages. The term is generally used to describe three programs in the health-care law — two temporary and one permanent — that make it less financially risky for health insurance plans to sell on the new exchanges. The term also is sometimes used to refer to one specific program in the health-care law known as "risk corridors" that limit both the amount of money that a health insurance plan can make and lose during the first three years it is sold on the new health-care exchanges established by the law.” - House Republicans might propose canceling ‘Obamacare bailouts’ to raise debt limit, Washington Post, 01/31/2014
Link to the entire article appears below:
http://www.washingtonpost.com/blogs/post-politics/wp/2014/01/31/house-republicans-might-propose-canceling-obamacare-bailouts-to-raise-debt-limit/
