The Center for Consumer Information & Insurance Oversight (CCIIO) hopes to speed up the process of getting federal risk management program cash out to health insurers.
CCIIO says its parent agency, the Centers for Medicare & Medicaid Services (CMS) will pay some Patient Protection and Affordable Care Act (PPACA) reinsurance benefits for the 2015 benefit year to eligible insurers by March 2016.
“Reinsurance funds not paid out through this early payment will be paid out in late 2016, as part of the standard reinsurance data submission, validation, calculation and payment process,” CCIIO officials say in a memo posted on the CMS website.
The announcement means that, if the final 2016 reinsurance program parameters are the same as the preliminary parameters CCIIO has already given, insurers will get half of their reinsurance payments for 2015 early in 2016 and half in late 2016.
It’s not clear whether CMS has paid insurers any of the money the PPACA reinsurance program owes the insurers for 2014.
CCIIO recently estimated that a second PPACA risk management program, the risk corridors program, which is supposed to get cash from thriving PPACA exchange plan issuers to help plan issuers with weak underwriting results in 2014, 2015 and 2015, may take in less than 13 percent of the cash it needs to cover the 2014 obligations for that program.
PPACA has prohibited health insurers from using information about people’s health problems when issuing or pricing new coverage since January 2014.
PPACA drafters created the risk corridors program, the reinsurance program and a third “three R’s” program, a risk-adjustment program, to protect health insurers against the risk that the new underwriting and pricing rules could swamp them with new, unexpected catastrophic claim risk.