What’s under that PPACA World rug?

2. Health Insurance Innovations executives see PPACA disruption helping short-term health insurance sells no matter what the Supreme Court does about the King vs. Burwell case.

Health Insurance Innovations Inc. (Nasdaq:HIIQ) released earnings later than it had originally expected, and that raised some questions about what kind of results the company might report.

In the end, the company showed solid growth. The non-major-medical health insurance distributor reported $472,000 in net income for the latest quarter on $25 million in revenue, compared with a $592,000 net loss on $16 million in revenue for the fourth quarter of 2013.

The company did well for agents: It paid them $12 million in commissions, up from $7.8 million in commissions during the year-earlier quarter.

Bruce Telkamp, the company’s chief operating officer, talked about the effects of PPACA, and the King vs. Burwell court case, on the short-term medical market during a conference call with securities analysts.

Telkamp said PPACA has helped short-term medical sales by sharply increasing the full, unsubsidized cost of major medical coverage for consumers who can get through medical underwriting, and by encouraging major medical insurers to emphasize use of narrow provider networks.

In June, the Supreme Court could issue a ruling that would eliminate the ability of the PPACA public exchanges managed by the U.S. Department of Health and Human Services (HHS) to offer premium subsidies for exchange plans.

That “would create substantial additional upside for the short-product category,” Telkamp said.

See also: 10 states where the Supreme Court may help short-term health sales

3. Even some big, well-known insurers are counting on PPACA “three R’s” risk-management programs to make the numbers work in some markets.

Analysts at A.M. Best Company put out a report about another issue related to commercial health insurance market finances: How much health insurers are depending on the PPACA risk corridors program to protect them against underwriting losses.

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Drafters of PPACA created the program to use cash from health insurers with thick underwriting margins to help insurers with poor results.

In December, Congress officially blocked HHS from using taxpayer money to shore up the program if insures with thick underwriting margins are hard to find.

The Best analysts found that at least 10 of the carriers that put risk corridors information in their financial statements for the third quarter of 2014 recorded a risk corridors program receivable that amounted to more than 10 percent of those companies’ capital and surplus. Best had no information about insurers recording big profits that could be used to pay for risk corridors program support for companies with poor results.

Insurers were probably conservative about pricing 2015 products, because of all of the talk about risk corridors program uncertainty that started in early 2014.

“However,” the analysts write, “it is possible that some carriers might experience a noteworthy drop in both absolute and risk-adjusted level of capitalization should the risk corridors receivables have to be reduced or written off.”