Risk corridor program lacks $2.5B

CMS reported last week insurers will receive $362 million in risk corridor payments for 2014, or 12.6 percent of the $2.87 billion requested.

This means the three-year risk corridor program — which aims to temporarily level the financial playing field for payers taking on newly insured, costlier patients — fell short by more than $2.5 billion in its first year.

Insurers pay into the program if their premiums exceed claims and other costs by a set amount. That money is funneled back to payers whose claims surpass premiums by a certain amount, effectively evening the risk of covering the newly insured.

Insurers will receive the payments for 2014 later this year. The $2.5 billion shortfall will be paid out of 2015 collections and 2016 collections, if necessary, according to CMS. In the event of a major shortfall in available funds in 2016, the last year of the program, CMS said it will explore other sources of funding.

"We recognize that for a limited number of insurers, a lower than expected 2014 risk corridor payment may raise concerns. We will be in close contact with those states and insurers in the coming days," said CMS in a statement.


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5 things to know about ACA enrollment trends

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