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NAHU defends PPACA risk programs

By Allison Bell

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The National Association of Health Underwriters is defending three new programs that are supposed to help protect health insurers against big, health law-related swings in claims risk.

The health insurance agents and brokers group has asked Congress to leave the programs — the Patient Protection and Affordable Care Act temporary reinsurance program, temporary risk corridor program and risk adjustment program — in place.

Members of Congress are considering two “Obamacare Taxpayer Bailout Prevention Act” bills — S. 1726 and H.R. 3541 — that would repeal the PPACA “3 R’s” programs.

NAHU Chief Executive Janet Trautwein said in a statement that killing the programs would increase health insurance prices in 2015 and reduce the number of coverage options.

PPACA calls for insurers and health plans to pay for the reinsurance and risk adjustment programs, but the federal government would have to pay part of the cost of the risk corridor program for three years if insurance company payments fall short.

The risk corridor program would shift money from insurers with lower-than-expected individual and small-group claims, inside and outside the PPACA exchange system, to insurers with exchange plan claims.

The lead sponsors of the 3 R’s repeal bills, Sen. Marco Rubio, R-Fla., and Rep. Tim Griffin, R-Ark., argue that the risk corridor program would be a federal bailout for health insurers.

Trautwein said calling the risk corridor program and the other 3 R’s programs a “bailout” is a gross mischaracterization of how insurance market stabilization mechanisms work.

“In a market already undergoing significant changes, removing risk-controlling factors could devastate smaller insurance companies,” Trautwein said. “This is especially ill-advised as two of the risk adjustment programs are temporary measures that will be phased out by the end of 2016, and the other program safeguards against adverse selection.”

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