Humana Inc. says it could get about $240 million from the three new federal “three R’s” risk-management programs for the first half of the year.
Humana (NYSE:HUM) could be on track to get a total of $575 million to $775 million in Patient Protection and Affordable Care Act (PPACA) three R’s money for all of 2014. Roughly three-quarters of the money could come from a temporary PPACA reinsurance program.
Executives at WellPoint Inc. (NYSE:WLP) declined to talk about what think they could get from the three R’s programs.
The drafters of PPACA created the three R’s in an effort to stabilize the individual and small-group health insurance markets, by protecting insurers against any big swings in risk that might occur as a result of the new PPACA major medical underwriting, pricing and product design rules.
Insurers are supposed to pay $63 per commercial plan enrollee for the reinsurance program this year. WellPoint is on track to pay more than $840 million in PPACA reinsurance program fees this year, for example, and Humana is on track to pay about $200 million in reinsurance fees. The companies won’t know what, if anything, they owe for the risk corridors and risk-adjustment programs until later.
The topic came up today during conference calls the companies held to go over second-quarter earnings.