America's Health Insurance Plans, the main industry lobbying group, on Thursday called on the federal government to bailout insurers for losses incurred through participating in Obamacare.
At issue is a provision within the law known as the risk corridors program. Under the program, the federal government is to collect money from health insurers doing better than expected and use those funds to provide a federal backstop to other insurers who incur larger than expected losses from rising medical claims. Republicans, fearing that this could turn into an open-ended government bailout, included a provision in last year's spending bill that limited the program, requiring the Department of Health and Human Services to pay out only from the pool of money collected, rather than supplementing it with other sources of government funding.
Now, because there have been industry-wide losses from Obamacare, there isn't enough money to go around. And that has insurers nervous.
"We've been very clear with the administration about the serious challenges facing consumers and health plans in this exchange market," said Marilyn Tavenner, the current chief executive of AHIP who previously ran the implementation of Obamacare as head of the Centers for Medicare and Medicaid Services. "Most recently, nearly 800,000 Americans have faced coverage disruptions as a result of the significant and unexpected shortfall with the risk corridors program. When health plans cannot rely on the government to meet its obligations, individuals and families are harmed as a result. The administration must act to ensure this program works as intended and consumers are protected."
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