The fight by health insurers to recover losses from the Affordable Care Act's risk-corridor programs continues.
Blue Cross and Blue Shield affiliates in Alabama and Tennessee were the latest plans to sue the federal government to force payment under the program.The insurers alleged they are owed about $250 million combined in unpaid risk-corridor payments for 2014 and 2015, according to separate cases filed this week in the U.S. Court of Federal Claims.
The risk-corridor program was created in the ACA as a safety net that would curb losses and profits in the first three years of the health insurance exchanges. Plans with greater than expected medical claims could recoup some of those losses, while insurers with lower than expected costs would pay into the program.
Several other insurers, including Blue Cross and Blue Shield of North Carolina, have also sued to recover missing risk-corridor payments. Many of the lawsuits alleged the federal government breached its contract to make good on the funds they promised.
Recovery of these funds thus far has been difficult. The U.S. Justice Department has asked the U.S. Court of Federal Claims to dismiss suits, claiming the insurers were never guaranteed payouts for their participation.
But a victory last month for Moda Health may give insurers some hope. A federal claims judge ruled the Justice Department owes the insurer $214 million in payments as part of its participation in the program, saying the government “made a promise” to insurers.
This ruling flew in the face of another federal judge's decision to dismiss a case brought forth by Land of Lincoln Mutual Health Insurance Co., which sued to recoup $72.8 million in risk-corridor payments.
Blue Cross and Blue Shield of Alabama claimed it is owed more than $90 million for its participation in 2014 and 2015. It has only received 12.6% of that amount. Blue Cross and Blue Shield of Tennessee alleges it is owed more than $161 million. It also only received 12.6% of that amount.
In total, the federal government owes insurers roughly $8.3 billion from the ACA's risk-corridor program to offset losses on the exchanges from 2014 and 2015. Insurers are owed more than $5.8 billion in net risk-corridor payments for 2015 alone, according to an analysis by Modern Healthcare.