Legislation to abolish the risk-corridor program, which provides financial protection to insurers participating in the Obamacare exchanges, has been introduced in the House and Senate.
The bills were introduced by Sen. Marco Rubio (R-Fla.), who is weighing a 2016 presidential bid, and Rep. Andy Harris (R-Md.), a physician.
“Taxpayers should not have to fund massive bailouts to protect the profits of the insurance companies that helped write Obamacare,” Rubio said in a statement.
The risk-corridor program was designed to limit risk for insurers participating in the exchanges during the first three years of operations because of uncertainty about the customer pool they would attract. Insurers that draw a more expensive population than anticipated will receive funds from the federal government to mitigate their losses, while those that attract a less costly clientele will have to pay into the fund. The Medicare prescription-drug program includes a similar protection for participating companies.
The budget deal to fund the government through September includes language preventing HHS from spending Medicare and Social Security trust fund money to fund the risk-corridor program this year and requires that it be budget neutral. That has raised questions about whether insurers will actually receive the funds they are anticipating.
CoOportunity Health, a not-for-profit insurer that was taken over by the state of Iowa last month because of financial struggles, cited uncertainty about $60 million in anticipated risk-corridor payments as part of the reason for its collapse.
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