Federal regulators have set the filing deadline for a major Patient Protection and Affordable Care Act (PPACA) insurer risk management program, the risk corridors program, on the next Friday the 13th — Feb. 13, 2015.
Affected insurers have to tell the Centers for Medicare & Medicaid Services (CMS) how many people they covered through individual and small-group policies during the 2014 benefit year, and how many of those enrollees had “transitional policies,” or “grandmothered policies.
CMS says it will accept the forms only from Monday, Feb. 9, through Friday, Feb. 13. Officials at CMS talk about the filing time line in a paperwork review act notice.
In theory, difficulties with meeting the filing deadline could threaten the financial performance, or even the solvency, of some of the affected major medical insurers.
In Iowa, for example, insurance regulators have suggested that uncertainty about PPACA risk-program payments may be partly responsible for its concerns about the stability of a new health insurer in their state.
Insurers and regulators have noted that claims in grandmothered blocks of health insurance business seem to be causing more problems than blocks of PPACA public exchange plan business.
To learn more about the risk corridors program and the program filing requirements, read on.
1. The history of an umbrella program
PPACA set up a temporary risk corridors program for all sellers of non-grandfathered individual and small-group major medical coverage.
The risk corridors program is supposed to use cash from insurers with good underwriting experience to shore up competitor insurers with very weak underwriting experience.
Republican critics of PPACA have described the program as a bailout for insurers.
PPACA drafters said they created the original risk corridors program in an effort to protect the insurers against the possibility that the new PPACA pricing and underwriting rules that took effect Jan. 1, 2014, could swamp them with high-cost enrollees and drive them out of business.