Health insurers that sold plans and lost money on the Affordable Care Act's exchanges in 2014 will receive only a portion of the $2.5 billion promised to them as safety-valve payments, a CMS official said last week.
The healthcare reform law established three “market stabilization” programs to help insurers weather the first few years of covering a new population with unpredictable healthcare needs. At issue is the risk corridors program, which expires at the end of 2016 and essentially limits how much money an insurer can lose or gain on its exchange plans. For example, if a health plan's medical claims exceeded expectations by more than 3%, the government will reimburse half of those losses. If claims surpassed expectations by more than 8%, the CMS will pay 80% of the losses.