Molina wins $52M ACA risk corridor suit
- 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.
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.
- The Incidental Economist The feds have been ordered to cough up risk corridor money.
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