An influx of insurers offering plans through Obamacare exchanges are taking a financial hit due to provisions in the president’s landmark health-care legislation – leading many to ask for a taxpayer bailout.
With companies facing losses much higher than initially anticipated, the Department of Health and Human Services has been unable to keep up with demands for funds from its risk-corridor program. The risk-corridor program was designed to provide funds to limit insurers’ increased costs brought on by the high claims costs seen since the implementation of the Affordable Care Act. HHS paid just $362 million in risk corridors charges– a tiny fraction of the$2.87 billion requested in 2014.
Now, the industry that once lobbied for the law’s implementation — assuming it would lead to an inpouring of new customers due to its individual and employer mandate — is hoping the American taxpayer will pick up the tab.
As noted by The Fiscal Times, Florida Republican Sen. Marco Rubio spearheaded the effort to prevent unlimited bailouts by attaching a measure to a must-pass budget bill preventing funds from being appropriated to the Obamacare program, instead having HHS dole out the funds using tax revenue brought in through Obamacare.
Blue Cross and Blue Shield of North Carolina is one of the most recent to file a lawsuit against the federal government, arguing they are not being provided with the funds promised to mitigate loses to help them stay afloat.
Nonprofit health insurer Highmark Inc. took legal action in May demanding roughly $223 million in payments alleging the government is violating the Fifth Amendment for its failure to provide the “just compensation” in a timely manner.
A report by McKinsey & Company found Obamacare insurers saw losses in a whopping 41 states leading to double-digit premium increases in many.
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