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Conservatives want Congress to curb PPACA aid for insurers

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(Bloomberg) — Conservative groups are pressing Republican leaders in Congress to renew a restriction on the Patient Protection and Affordable Care Act (PPACA) risk corridors program.

Organizations including Heritage Action for America, the Club for Growth and Americans for Tax Reform want new limits on the risk corridors program added to a broad spending bill that Congress must pass by Dec. 11 to avoid a government shutdown. They made their appeal Tuesday in a letter to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell.

The risk corridors program is supposed to use cash from thriving PPACA exchange plan issuers to help struggling issuers, but it’s on track to collect far less cash from thriving issuers than it needs to meet its obligations, according to the Centers for Medicare & Medicaid Services (CMS) and the parent of CMS, the U.S. Department of Health and Human Services (HHS).

The conservative groups’ letter comes a week after CMS said it would ask Congress to cover shortfalls in the program.

“Taxpayers should not be on the hook for any more of Obamacare’s failures, and so we urge you to ensure that their voices prevail by continuing to include language preventing risk corridors from becoming a taxpayer bailout in any future appropriations bill,” the groups wrote.

A spokesman for McConnell, a Kentucky Republican, did not immediately respond to a request for comment. A Ryan spokeswoman, AshLee Strong, declined to comment and referred questions to the House Appropriations Committee.

Spokespeople for Democrats and Republicans on the committee both declined to comment.

Stable premiums

Insurers asked for $2.87 billion from the risk corridors program for losses in 2014, the first year the PPACA exchanges started to sell coverage. On Oct. 1, HHS said it could pay struggling exchange plan issuers only $362 million, less than 13 cents on the dollar, because of restrictions already imposed by Congress.

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

“Consumers and health plans have faced a number of challenges in the transition to the new exchange market,” Clare Krusing, a spokeswoman for America’s Health Insurance Plans (AHIP), the industry’s Washington lobby group, said in an e-mail. “The focus should be on providing stability for individuals and families and avoiding coverage disruptions in the future.”

See also: S&P analyzes risk corridors shortfall hit

The program was intended to help keep insurance premiums, and the exchange program, stable in the early years, and it expires Sept. 30, 2016, the end of federal fiscal year 2016.

The conservative groups asking for risk corridors to be curtailed said in their letter that they had predicted insurers would likely demand “much more in returns from the program than they were putting into it.”

“That prediction has turned out to be true,” the groups said. The letter was signed by Heritage Action for America Chief Executive Officer Michael Needham, Americans for Tax Reform President Grover Norquist, Club for Growth President David McIntosh, and representatives of more than a dozen other groups.

The CMS office that administers the program, the Center for Consumer Information and Insurance Oversight (CCIIO), said in a Nov. 19 memo to insurers that it would use risk corridor collections in 2015 “and if necessary, 2016″ to pay the balance it owes for 2014.

In the event of a shortfall in 2016, the government “will explore other sources of funding for risk corridors payments, subject to the availability of appropriations,” the memo said. “This includes working with Congress on the necessary funding.”

Rep. Jim Jordan, R-Ohio, who chairs the Freedom Caucus, suggested that the Obama administration would find little sympathy.

“Obamacare’s risk corridors program will cost American taxpayers billions if Congress does not continue to restrict its use,” Jordan said in a statement e-mailed by a spokesman.

 

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