Humana writes off $591M risk corridor receivables
- Humana on Thursday announced it will write-off $591 million in receivables associated with the risk corridor program under the ACA.
- Last October, news broke that insurers offering health plans through the ACA marketplaces would only get about 13% of the money they were supposed to receive through the risk corridors program, designed to cushion the risk for insurers taking on large numbers of potentially expensive enrollees.
- The risk corridor program, as Humana notes in their prepared statement, will sunset December 31.
The company anticipates collection of approximately $8 million in risk corridor receivables outstanding as of September 30 associated with the 2014 plan year based on information published by CMS on November 18.
Humana expects the company's core business to continue to "perform as previously expected."
Risk corridor payments, or lack thereof, were a thorn in the side of many insurers. The lack of payments contributed to some of the health insurance co-ops created under the ACA to close shop. Last month, a federal judge tossed out Illinois health insurance co-op Land of Lincoln Health’s lawsuit seeking more than $75 million it claims it was owed by the government under the ACA’s risk corridors program.
While Humana stated the Land of Lincoln case decision spurred the write-off noting "a change in interpretation of the Affordable Care Act associated with a recent court decision involving parties unrelated to the company now requires the company, under applicable accounting rules, to write-off essentially all of the $591 million in receivables associated with the risk corridor premium stabilization program outstanding as of September 30."
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