Dive Brief:
- CMS circulated a memo last Thursday in which the agency repeats its intent to eventually provide insurers what they are owed under the risk corridors program.
- The memo was released following an announcement earlier the same day from UnitedHealth Group questioning future ACA marketplaces participation after 2016 due to $425 million in losses from its ACA plans.
- According to the memo, the remaining 2014 risk corridors payments will be made from 2015 collections, or if necessary, 2016 collections.
Dive Insight:
As the largest health insurer in the U.S., UnitedHealth Group's difficulty and potential exit raised questions about the health and future of the exchanges.
The program ends after 2016, but if insurers continue to be owed money under the 2016 program, HHS says it “will explore other sources of funding for risk corridors payments, subject to the availability of appropriations. This includes working with Congress on the necessary funding for outstanding risk corridors payments.”
CMS' reassurance may not carry much weight due to the lack of a solid plan, which would then depend upon cooperation from Congress and the availability of appropriations. Also, the issue for insurers is not just whether CMS will pay, but when. The release this year of just 12.6% of the payment requests for 2014 is widely noted as a contributing factor in the demise of numerous co-ops.
As Modern Healthcare noted, CMS may be attempting to assuage insurers concerns, although UnitedHealth Group was not actually owed any risk corridors payments for 2014 because it only entered the marketplaces in 2015.
Despite its lack of a solution, CMS used strong language to solidify its intent, stating "HHS recognizes that the Affordable Care Act requires the Secretary to make full payments to issuers, and HHS is recording those amounts that remain unpaid following our 12.6% payment this winter as fiscal year 2015 obligation of the United States Government for which full payment is required."