Health Republic Insurance Company is about to invite other health insurers to participate in its class-action lawsuit over Affordable Care Act risk corridors program payments.
U.S. Court of Federal Claims Judge Margaret Sweeney approved Health Republic’s class-action notice and opt-in form Friday.
Lawyers for Health Republic are supposed to send the notice to potential class members by March 15. Insurers that want to join in can sign up at http://www.riskcorridorsclassaction.com/optin.
At press time, the opt-in website was not yet in operation.
Health Republic was a small health insurer based in Lake Oswego, Oregon. It shut down at the end of 2016, in part because of problems with collection payments from the ACA risk corridors program.
Designers of the ACA risk corridors program created it to encourage insurers to participate in the ACA public exchange program and keep premiums as low as possible. The program was supposed to use cash from exchange plan issuers that did well in 2014, 2015 and 2016, and, possibly, from other sources, to help issuers that did poorly.
A similar Medicare Part D prescription drug plan risk corridors program could get cash from the U.S. Department of Health and Human Services if payments from thriving issuers were too low to make the payments promised to struggling issuers.
Republican opponents of the ACA succeeded at getting provisions blocking use of any funding other than payments from thriving issuers for 2014 and 2015.
Because the number of thriving issuers was small, and because of the ban on use of any funding other than payments from thriving issuers, the ACA risk corridors program made only $362 million of the $2.9 billion in payments owed for 2014, and it collected only $95 million of the $5.9 billion needed to make the 2015 payments. Program managers have used all of the 2015 program revenue to increase the amounts paid to carriers owed payments for 2014.
Charles Canter, a Justice Department lawyer, says Health Republic has failed to state a valid claim. (Photo: Ed Brown/Wikimedia Commons Public Domain)
Swedlow and Canter
Health Republic filed a suit, Health Republic Insurance Company v. the United States of America (Case Number 1:16-cv-00259), in the U.S. Court of Federal Claims in February 2016. Health Republic sought to represent a class of insurers seeking risk corridors program payments.