CMS owes insurers $12B+ in risk corridors payments: 4 things to know

CMS released risk corridors payment amounts and charges for the 2016 benefit year Monday.

Here are four things to know.

1. Under the temporary risk corridors program, which ran from 2014-16, the government collected payments from insurers if their premium revenue outpaced claims costs by a certain amount. The government then redistributed the payments to insurers whose premium revenue was lower than claims costs by a certain amount.

2. For the 2014 plan year, HHS notified insurers they would receive only 12.6 percent of owed payments. The risk corridors program fell short by more than $2.5 billion in its first year. As the government continued to pay off the 2014 debt in 2015, that year's owed risk corridors payments grew as well. 

3. Including owed risk corridors payments from 2014-16, CMS owes more than $12 billion dollars to insurers, Timothy Jost, an emeritus professor at Lexington, Va.-based Washington and Lee University School of Law, wrote in a Health Affairs blog post. The post cites analyses by Wesley Sanders.

4. The following five insurers are owed the most for 2016, according to CMS: 

  • Blue Cross Blue Shield of Texas — $168 million
  • Kaiser Foundation Health Plan — $156 million
  • SelectHealth of Utah — $144 million
  • Blue Cross Blue Shield of Illinois — $116 million
  • North Shore-LIJ Insurance Company — $113 million

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