ACA insurers won't get billions in risk corridors payments, court says: 5 things to know

A federal appellate court ruled health insurers are not owed billions of dollars in funding under the ACA's risk corridors program, according to Law360.

Here are five things to know:

1. In two cases brought by insurers Moda Health Plan and Land of Lincoln Mutual Health, the federal appellate court decided Congress could legally withhold risk corridors funds from the two health plans.

2. The temporary risk corridors program was designed to level the financial playing field for payers during the first three years of the ACA's implementation, 2014-16. Under the program, the government collected payments from insurers with lower than expected claims on the health insurance exchanges and made payments to insurers with higher than expected claims.  

3. The court determined the federal government is not required to make the payments because Congress took action to require the program be budget neutral, though this action came after the ACA's passage. The risk corridors program only paid 12.6 percent of payments it owed to health insurers in 2014.

4. In their lawsuits, Moda Health Plan and now-shuttered Land of Lincoln Mutual Health seek hundreds of millions of dollars in risk corridors payments, according to Politco. The federal appellate court's decisions may set a precedent for the at least three dozen other insurers that have filed similar cases against the government.

5. Collectively, the insurers are owed more than $12 billion in unpaid risk corridors payments. Many insurers have argued rising premiums and insurer exits from the ACA marketplace are in part a result of the end of risk corridors payments.

More articles on payer issues:
Judge: Feds owe Moda Health $214M in risk corridors payments
HHS scrubs risk corridors funding from budget proposal: 3 things to know
Judge dismisses BCBS of North Carolina's suit to recoup $130M in risk corridors payments

Copyright © 2022 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Webinars

Featured Whitepapers

Featured Podcast

Top 40 articles from the past 6 months