The risk corridors program, which ended in 2016, was designed to level the financial playing field for payers during the first three years of the ACA’s implementation. Under the program, HHS collected payments from insurers with lower than expected claims on the health insurance exchanges and made payments to insurers with higher than expected claims.
Here are three things to know.
1. Judge Lydia Kay Griggsby sided with HHS regulators’ argument that the ACA does not require the government to issue risk corridors payments annually. Judge Griggsby wrote in her opinion the ACA “neither addresses, nor establishes, a deadline for the payment of the risk corridors program payments,” according to the report.
2. The decision represents a growing rift between other claims courts ruling on similar suits, The National Law Journal reports. In February, a judge ruled the government owes Portland, Ore.-based Moda Health $214 million in risk corridors payments. In that case, Judge Thomas Wheeler determined the ACA requires annual payments to insurers, and Congress did not design the risk corridors program to be budget-neutral. He concluded the government unlawfully withheld risk corridors payments from Moda and is liable for them.
3. A number of health insurers have sued the federal government for funds they were owed under the program after HHS notified insurers they would receive only 12.6 percent of payment owed for 2014. The risk corridors program fell short by more than $2.5 billion in its first year because of financial losses incurred on the individual market.
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