Dive Brief:
- Congress' spending bill unveiled Tuesday night would limit the Affordable Care Act's "risk corridors" program, which is part of a three-tiered safety net for insurance companies that sell coverage in the law's exchanges. The net result is likely to be an increase in insurance premiums.
- Risk corridors have been used in the past without much fuss, but Obamacare's risk corridors became controversial earlier this year when some Republicans, led by Sen. Marco Rubio, criticized the program as a "bailout" for insurance companies and sought to repeal it.
- However, the Obama administration had signaled that it would be willing to dip into other funding streams if necessary—if a lot of insurers had a bad experience in the exchanges and there wasn't enough money to pay them just using the funds collected from within the industry.
Dive Insight:
The potential ripple effect of the spending bill on consumers is concerning—especially now that the 2014-2015 enrollment period is in full swing. While it remains to be seen how a limitation in the risk corridors program will pan out, the insurance industry isn't so optimistic.
"American budgets are already strained by healthcare costs, and this change will lead to higher premiums for consumers and make it more difficult to achieve affordability," Clare Krusing, communications director at America's Health Insurance Plans, told the National Journal. "Our focus should be on changes to the law that will lower costs—like repealing the health insurance tax—not those that drive premiums higher."