Tuesday, July 29, 2014

Insurer Bailout - Taxpayers Could Be On The Hook For $725 Million In 2014

 By Coleen Elkins

Is there light at the end of the tunnel for health insurers? Some insurance carriers became fearful when they began to realize their premiums may have to rise as high as 20 percent in 2015.

The Affordable Care Act created a risk corridor to protect the insurance companies that take on the sickest patients. Keep in mind risk corridors protect profits not patients. The intent of the program was to pool payments from insurers and redistribute the funding to the companies that enrolled the chronically ill and the higher cost patients. This would pass the bill off the the companies with higher profits.

The administration has eased the minds of insurance carriers by issuing rules that permit taxpayer funding to be paid out through the "risk corridor program" which was supposed to balance itself.

Premiums are still rising by double digits in some states and the laws reinsurance and risk corridor are set to expire in 2016. What consumers see for rate in 2017 may be shocking as a result.

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