Dive Brief:
- The U.S. Court of Federal Claims last Friday ruled Molina Healthcare is owed $52 million by the federal government for the Affordable Care Act's (ACA) risk corridor program.
- Molina is the second insurer to win such a case. In February, the same court ruled in favor of Moda Health and ordered the government to pay Moda $214 million. The Justice Department appealed this decision in May.
- Over two dozen similar cases are hanging in the balance of federal courts, according to Modern Healthcare.
Dive Insight:
The risk corridor program under the ACA is meant to help offset payer costs for potentially taking on more expensive enrollees. However, in 2015 insurers only received about 13% of the funds they were supposed to receive.
This caused many of the health insurance co-ops operating under the ACA to close up shop, as they didn't have rainy day funds to weather lean times.
The win for Molina is a bright spot on a week that saw the insurer post a $230 million loss for Q2 and stating it will cut about 7% of its workforce (about 1,500 employees).
With similar lawsuits in the wings, the federal government could see itself owing more money to insurers that suffered under the risk corridor program. However, a federal court dismissed a Maine Community Health Options lawsuit on the same issue last week, Modern Healthcare reported.