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Regulators wrestle with PPACA risk corridors numbers

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State insurance regulators have had trouble getting some of the numbers they need to analyze the effects of the huge deficit at the Patient Protection and Affordable Care Act (PPACA) risk corridors program.

The program was supposed to use cash from thriving PPACA exchange plan issuers to stabilize struggling issuers, but the U.S. Department of Health and Human Services (HHS) announced Oct. 1 that the program will pay less than $362 million of its $2.9 billion in obligations.

See also: Feds: PPACA risk program may pay just 13% of 2014 claims

Members of the Capital Adequacy Task Force, an arm of the National Association of Insurance Commissioners (NAIC), talked about risk corridors program data Nov. 10, during a conference call, according to call minutes included in a packet prepared for the NAIC’s fall meeting.

During a discussion of health insurers’ 2014 financial strength data, task force members said a lack of standardized risk corridors data was hurting their ability to analyze the impact of the shortfall.

For 2014, some insurers reported 100 percent of the amount they thought the risk corridors program would owe them.

Some insurers reported no risk corridors program receivable, based on the expectation that program would flop.

See also: Regulators back away from PPACA 3 R’s accounting draft

Some insurers reported part of what the program owed them, based on the assumption that the program would pay some of what it owed.

Kristi Bohn, a Minnesota regulator who participated in the task force call, said she would like to see insurers report the full estimated risk corridors program receivable for 2015, to help her understand how the 2014 shortfall affected health insurers, and to see what might lie ahead this year, according to the call minutes.

If each insurer gave an estimate of the full risk corridors receivable, “this would allow the regulatory community to understand the program about six months in advance of when the actual [HHS] numbers would be known,” according to the call minutes.

PPACA drafters created the risk corridors program in an effort to protect exchange plan issuers against the effects of new PPACA rules and exchange startup problems, and to encourage insurers to hold down premiums. 

Insurers originally thought HHS would find the money to make good on program obligations if payments from thriving issuers fell short, but House Republicans called the program a health insurer bailout, and HHS eventually announced that it would run the program in a “budget neutral” fashion, without using taxpayer money to make up for any insurer payment shortfalls.