A law professor told members of Congress this week that the new Patient Protection and Affordable Care Act risk corridor program could end up turning a profit for the federal government.
Timothy Stoltzfus Jost, a Washington and Lee University faculty member who supports PPACA, appeared Wednesday at a hearing organized by the House Oversight and Government Reform Committee to defend the temporary risk corridor program and the other PPACA “3 R’s” programs — the temporary PPACA reinsurance program and a permanent PPACA risk adjustment program.
The risk corridor program would take money from all individual and small-group plans, on and off the public exchanges, with claims at least 3 percent lower than the projected amounts and pay the money to plans with total claims at least 3 percent higher than the projected amounts. PPACA requires the federal government to make up for any funding shortfalls in that program for three years.
Jost said a similar risk corridor program has been protecting insurers in the Medicare Part D prescription drug market since 2006.
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That program “has turned out to be a net money-maker for the federal government,” Jost said, according to a written version of his testimony.