Nineteen U.S. health insurers may have been hoping to get more than $10 million each from the Patient Protection and Affordable Care Act (PPACA) risk corridors program, according to a team at Standard & Poor’s Ratings Services.
An S&P team led by Deep Banerjee crunched the numbers and created a list showing which carriers had recorded the biggest PPACA risk corridors receivables as of June 30, 2015.
PPACA drafters created the risk corridors program to give insurers the confidence to participate in the PPACA exchange program and keep premiums as low as possible. The program is supposed to use cash from exchange plan issuers that do well in 2014, 2015 and 2016 to cushion exchange plan issuers that do poorly in those years against the effects of poor results.
Banerjee’s team predicted in May that the program would collect only enough cash to pay about 10 percent of its obligations.
Officials at the U.S. Department of Health and Human Services (HHS) told state insurance regulators in July to assume the risk corridors program would collect enough cash from thriving insurers to make good on its obligations for 2014, then told insurers in early October that the program had collected only enough cash to pay about 13 percent of the program’s obligations.
An official at the Centers for Medicare & Medicaid Services (CMS), an HHS division, said at a hearing earlier this week that officials learned about the severe shortfall only after insurers filed financial reports for 2014 this summer.