BCBSA lobbies to protect reinsurance fund

Document titled "Patient Protection and Affordable Care Act"

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The Blue Cross Blue Shield Association is asking legislators to uphold a vital premium stabilization program in response to Republican efforts to derail the Affordable Care Act provision.

Some legislators are trying to stop the Department of Health and Human Services from distributing 2016 reinsurance payments, the BCBSA said in a memo obtained by The Hill. Republican efforts to block the reinsurance payments for benefit year 2016 would lead to “higher premiums and less choice for consumers,” the organization argued.

The reinsurance program paid out $7.7 billion in 2015 to help insurers deal with costly medical claims from patients who acquired coverage through the ACA marketplaces.

Still, Aetna, UnitedHealth, Oscar and Scott & White have significantly reduced or eliminated their participation in 2017 ACA marketplaces, citing financial losses.

Detractors of the reinsurance fund have denounced the program as a bailout for health insurers.

The Senate Committee on Homeland Security and Governmental Affairs sent a letter at the end of July to HHS Secretary Sylvia Burwell asking for documentation on the decision to “prioritize” reinsurance payments over payments to the Treasury. The BCBSA, though, argued that those complaints concern a "completely separate" program.

The BCBSA adds in the memo that the reinsurance credits are not federal funds--they are funds pooled together by payers--and subsequently should not be considered a bailout. Further, insurance companies have received fewer funds from the reinsurance program than initially anticipated.  

Centers for Medicare & Medicaid Services Acting Administrator Andy Slavitt also previously defended the reinsurance program, saying: "CMS received universal public support for the policy of returning payments back to cover claims as a first priority, and no one--not one commenter--questioned the legality or the appropriateness of the approach."