The Centers for Medicare & Medicaid Services (CMS) has moved another step closer to starting a big insurance program for public exchange insurers, the Patient Protection and Affordable Care (PPACA) risk corridors program.
CMS is putting the risk corridors program form through a federal paperwork review process. Officials put the form in a review packet with the 2014 medical loss ratio (MLR) form.
CMS says it expects 517 companies to file MLR reports for the 2014 plan year, and 91 companies to file risk corridors forms.
The PPACA minimum MLR provision requires major medical insurers to spend at least 85 percent of large-group revenue and 80 percent of individual and small-group revenue on health care and quality improvement or else pay rebates. CMS is predicting that 123 issuers will owe rebates for 2014.
The PPACA risk corridors program, which is completely separate from the minimum MLR provision, is supposed to use cash from PPACA exchange issuers with big underwriting margins to help exchange qualified health plan (QHP) issuers with underwriting margins under 3 percent.
PPACA drafters say they created the program, which is set to last for only three years, to encourage early participants to keep premiums low.