Health insurance company financial reporting executives who were hoping to relax by the beach in July may have to put away their beach towels.
Officials at the Center for Consumer Information & Insurance Oversight (CCIIO) explained how the big three Patient Protection and Affordable Care Act (PPACA) risk-management programs will eat the financial executives’ summer in a collection of answers to insurers’ questions about the “three R’s” programs.
Officials told insurers this week that:
The PPACA reinsurance program will send each affected health insurer information about how much PPACA reinsurance money it can expect to receive for 2014 on June 30.
An insurer has to include the reinsurance payment information given out on June 30 in a critical filing for the PPACA risk corridors (RC) underwriting profit margin protection program. The filing for the risk corridors program, which could be the equivalent of a life raft for some insurers with bad underwriting results, is due July 31.
Risk corridors program managers will collect cash from the health insurers that did well in 2014 from October 2015 through November 2015.
Risk corridors program managers “will begin to make RC payments to issuers in December 2015.”
The answers could affect commercial health insurance agents, brokers and consultants by determining how interested insurers are in continuing to sell health insurance in 2016.
What is CCIIO?
CCIIO is part of the Centers for Medicare & Medicaid Services (CMS). CMS is part of the U.S. Department of Health and Human Services (HHS).
HHS and CMS set up CCIIO to oversee the HHS programs created by the Patient Protection and Affordable Care Act of 2010 (PPACA) that affect the commercial health insurance important.
What is a PPACA risk-management program?
The people who wrote PPACA added many product design and underwriting rules that could increase health insurance claims for all insurers, and change the way the sickest people choose health coverage in unexpected ways.
To keep a flood of sick new enrollees from destroying health insurers, and give insurers confidence to hold premiums as low as possible, the PPACA drafters created a temporary reinsurance program, to use cash from all insured people to protect issuers of individual coverage against enrollees with catastrophic claims; a temporary risk corridors program, to use cash from exchange plan issuers with high underwriting profit margins to help insurers with weak margins; and a permanent risk-adjustment program, to use cash from insurers with relatively low-risk enrollees to help insurers with relatively high-risk enrollees.
CCIIO has given information about how the programs will work slowly, and in spurts, and often in unexpected places. The new answers to the three R’s questions, for example, appear mostly on the password-protected Regtap website. Ordinary people cannot search for information on the Regtap site using ordinary search engines. They have to sign up for Regtap accounts, and go to Regtap to search Regtap, to know what’s there.
What else has CCIIO said about the three R’s programs recently?
CCIIO has also answered many other three R’s questions on Regtap. Many deal with administrative procedures, but some could affect how much money insurers get from the three R’s programs.