Another insurer has filed a complaint against the federal government seeking two years’ worth of risk corridor payments, adding to a growing list of companies that are taking legal action to recoup their losses.
Illinois-based Land of Lincoln Health claims it received just more than $525,000 in risk corridor payments in 2014 even though it was owed more than $4.1 million. The insurer has not received any of the $68.9 million it says it is owed for 2015.
The risk corridor program was established under the Affordable Care Act to compensate insurers that took on higher-risk beneficiaries. However, the program has been plagued with shortfalls, paying health plans only 12.6 percent of what they were owed for 2014 because fewer plans paid into the program than expected.
“Every insurer went in understanding that the first few years would have a lot of volatility,” Jason Montrie, president and interim CEO of Land of Lincoln, told the Chicago Tribune. “When one of the primary mechanisms designed to help stabilize the market is removed, it creates a lot of damage.”
The Illinois consumer operated and oriented plan has been hit with $97 million losses throughout 2015 and the first quarter of 2016, according to the Associated Press, forcing it to stop accepting new small-business enrollees and new individual members. Land of Lincoln joins three other payers that have also sued the government based on failed risk corridor payments, including Highmark, Blue Cross Blue Shield of North Carolina and Health Republic Insurance of Oregon.