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No risk corridors payments for 2015 plan year

HHS is asking insurers to pay 2016 collections to reimburse for 2014 benefit year.

Susan Morse, Senior Editor

There's no money from 2015 risk corridors collections to pay for the 2015 plan year, insurers were told in a Sept. 9 letter from the Department of Health and Human Services.

HHS said it anticipates that all 2015 collections will be used for 2014 risk corridors payments, and no funds will be available for 2015.

HHS expects to begin collecting risk corridors charges for 2016.

Collections from the current 2016 benefit year will be used for the the remaining 2014 risk corridor payments, HHS said, then for 2015 and finally for 2016.

[Also: CMS will propose rule to modify Obamacare risk adjustment program]

"As we have said previously, in the event of a shortfall for the 2016 benefit year, HHS will explore other sources of funding for risk corridor payments, subject to the availability of appropriations," the letter states.

This includes working with Congress for funding.

The Affordable Care Act requires HHS to make full payment to issuers, HHS said.

"HHS will record risk corridors payments due as an obligation of the United States Government for which full payment is required," the letter states. "We know that a number of issuers have sued in federal court seeking to obtain the risk corridors amounts that have not been paid to date."

HHS is willing to discuss a resolution to the lawsuits, it said.

[Also: Land of Lincoln joins co-ops shutting down due to risk corridor payments]

America's Health Insurance Plans said that to protect consumers, it is critical to fix the program to work as originally intended and to advance the goals of affordable and stable coverage.

"Consumers deserve affordable health coverage. And the risk corridor program was designed to help health plans deliver predictable, affordable coverage – just like in the Medicare prescription drug program," said David Merritt, executive vice president of Public Affairs. "Because the program hasn't worked as designed, consumers and their families across the country have faced the consequences of fewer plan choices, less affordable options, and gaps in coverage." 

Risk corridors is among three federal programs geared towards helping insurers bear the risk of offering products on the Obamacare exchanges.

Under the risk corridors program, CMS intends to limit insurers losses and gains in payments meant to stabilize the cost of premiums.

In April 2014, HHS issued a bulletin on risk corridors and budget neutrality over the course of the three-year program. If there were insufficient collections, risk corridor payments for the year would be reduced pro rata to the extent of any shortfall, HHS said.

Another program, risk adjustment, redistribute funds from plans with lower-risk enrollees to plans with higher-risk enrollees.

Numerous insurers have sued the federal government over what they claim is insufficient payment. Aetna and other insurers have blamed the lack of risk adjustment payment for speeding their exit from the ACA exchange markets.

Twitter: @SusanJMorse