Health insurers’ lawsuits that target the Affordable Care Act’s premium stabilization programs may not end up being very effective--at least not right away.
Highmark and Blue Cross Blue Shield of North Carolina are among the insurers that have sued the federal government in an effort to recoup payments they are owed from the risk corridor program, which only paid out 12.6 percent of what it owed insurers for 2014.
Meanwhile, Maryland consumer operated and oriented plan Evergreen Health has sued over the risk adjustment program, which it and other CO-OPs say unfairly penalizes smaller insurers.
The newest wave of payments owed to the risk corridor program has spurred CO-OPs including HealthyCT and Land of Lincoln to wind down operations, leaving just seven remaining ACA-born startup insurers out of the original 23. CO-OPs also have been hit hard by the risk corridor program shortfalls.
Yet the government has a valid argument that the lawsuits are premature, Epstein Becker Green attorney Clifford Barnes tells The Hill, noting that it has three years to pay. Making that precise argument, the Department of Justice has responded to just one claim so far, filing a motion to dismiss a suit from Oregon CO-OP Health Republic Insurance over the risk corridor program.
University of Michigan law professor Nicholas Bagley tells the publication that he thinks the insurers that sued over risk corridor payments will “eventually” prevail and get paid, as the government’s promise to do so is enforceable in court.
He sees Evergreen’s suit over risk adjustment as weak, saying its argument that the design of the program is flawed is more akin to a policy disagreement. CMS has, however, explored ways to improve the risk adjustment program.
- read The Hill article