An ObamaCare October surprise.
October 4, 2016
Dr. John W. Rowe, who was the chief executive of Aetna from 2000 to 2006 and the president of Mount Sinai Medical Center in New York before that, predicted that “the insurance market will stabilize in two or three years.”
“We are not in a death spiral,” Dr. Rowe said. “If this were a patient, I would say that he’s not in intensive care, but he’s still in the hospital and requires careful monitoring.”
But that does not mean the act will heal on its own, said Sara Rosenbaum, a professor of health law and policy at George Washington University.
Justice Department officials have privately told several health plans suing over the unpaid money that they are eager to negotiate a broad settlement, which could end up offering payments to about 175 health plans selling coverage on ACA marketplaces, according to insurance executives and lawyers familiar with the talks. . . .
The money in question involves one of three strategies to help coax insurers into the marketplaces by promising to cushion them from unexpectedly high expenses for their new customers. This particular strategy, known as “risk corridors,” was for the marketplaces’ first three years, when it was unclear how many people would sign up and how much medical care they would use. . . .
The risk corridors started in 2014. The crunch became apparent last fall, when federal health officials announced that they faced an enormous gap because so many more health plans incurred high expenses for their ACA customers than low ones. For that reason, HHS [the Department of Health and Human Services] made less than $400 million in 2014 risk-corridor payments—just 12.6 percent of $2.9 billion it owed overall.
[GOP lawmakers made] a calculation based on what turned out to be pretty smart politics but really bad for the country: If they cooperated with me, then that would validate our efforts. If they were able to maintain uniform opposition to whatever I proposed, that would send a signal to the public of gridlock, dysfunction, and that would help them win seats in the midterms. It was that second strategy that they pursued with great discipline. It established the dynamic for not just my presidency but for a much sharper party-line approach to managing both the House and the Senate that I think is going to have consequences for years to come.