Insurance agents and brokers are struggling to get answers to a question they’re just learning how to ask: How many health carriers are suffering serious problems as a result of the risk corridors program funding gap?
Are most of the carriers aching from risk corridors’ flu of small new plans, or are bigger, older carriers also coughing?
Julia Hutchins, chief executive officer of Colorado HealthOP, said she thinks the idea that the typical risk corridors program gap victim is a Consumer Operated and Oriented Plans (CO-OP) company may be incorrect.
In Colorado, the area of concern “is much broader than just the CO-OPs,” Hutchins said. “It’s small plans across the board.”
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One CO-OP shut down in late 2014, and four are set to shut down later this year. In each case, CO-OP managers or state insurance regulators have cited concerns about the risk corridors program as a reason for ending the sale of health coverage.
WINhealth, a Wyoming health maintenance organization (HMO) owned by Cheyenne Regional Medical Center and a Wyoming group medical practice, has announced plans to withdraw from Wyoming’s PPACA exchange in 2016, in part because of concerns about the status of $4.4 million in risk corridors program payments. The carrier has about 15,000 enrollees, including 8,200 who came in through HealthCare.gov, the Patient Protection and Affordable Care Act (PPACA) exchange enrollment system managed by the U.S. Department of Health and Human Services (HHS).
The company had to get a loan from the regional medical center because of delays in getting the risk corridors money and more than $9 million in other anticipated PPACA program payments, according to local news reports.
A.M. Best Company Inc. put the financial strength rating of Oregon Dental Services and Moda Health Plan Inc., one of its subsidiaries, “under review with negative implications,” in part because of concerns about Moda Health’s $89.5 million risk corridors program receivable.
In Pittsburgh, a much bigger carrier, Highmark, has complained about the possibility that it may have a hard time collecting on its $200 million risk corridors program receivable.
At press time, America’s Health Insurance Plans (AHIP), the Blue Cross and Blue Shield Association, and state and federal regulators had not released any data on the number of carriers facing noteworthy risk corridors-related problems.
Marilyn Tavenner, the new president of AHIP, and former Centers for Medicare & Medicaid Services (CMS) administrator, who helped oversee the construction of the risk corridors program, put out a statement saying stable, affordable coverage for consumers depends on adequate risk corridors program funding.
“It’s essential that Congress and CMS act to ensure the program works as designed and consumers are protected,” Tavenner said in the statement.
PPACA created the risk corridors program and two other PPACA “three R’s” risk management programs, to protect health insurers from some of the wild swings in risk that might occur as a result of the PPACA underwriting restrictions, benefits mandates and other rules and programs that came to life in January 2014.