Community Health Options, Maine's only health insurance co-op, is suing the federal government, claiming the U.S. failed to pay the insurer nearly $23 million in payments owed under the Affordable Care Act's risk corridor program, according to the Bangor Daily News.
The risk corridor program is designed to temporarily level the financial playing field for payers by limiting both unexpectedly high gains and losses associated with participating in a new insurance market. Insurers that saw greater profits paid into a pool to compensate insurers with higher losses. The three-year program, which runs through 2016, fell short by more than $2.5 billion in its first year because so many insurers experienced losses in the individual market.
Due to the shortfall, HHS said insurers initially would only receive 12.6 percent of the money claimed under the risk corridor program for 2014. In its suit, Community Health Options is seeking the full amount it is owed for that year.
"We at Health Options have followed the law and helped expand the Maine and New Hampshire markets and make them leaders in terms of individual coverage through the marketplace," Community Health Options CEO Kevin Lewis told Bangor Daily News. "It's important for the government to make good on its payment obligations."
Community Health Options posted $31 million in losses in 2015 and has set aside $43 million to cover expected losses in 2016.
More articles on payer issues:
Aetna-Humana merger trial slated for Dec. 5
Piedmont, BCBS of Ga. implement value-based contract
DOJ's lawsuits against insurer mega-mergers: 16 key events