More than two dozen conservative groups asked Republican leaders Tuesday to make certain that a looming spending deal reins in a part of Obamacare designed to protect insurers during the overhaul’s early rounds.
The letter to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell singles out risk corridor payments, which is money the government promised to cover losses in poor-performing plans on insurance exchanges set up under the Affordable Care Act.
The health law requires the administration to make the full payments, but a spending deal that Congress struck at the end of 2014 mandated that the program be budget neutral, so lawmakers won’t be able to rescue insurers who expected payments from better performing plans, as they try to get a handle on who’s signing up in the new marketplace.
A who’s who of right-leaning groups urged Mr. Ryan, Wisconsin Republican and Mr. McConnell, Kentucky Republican, to continue that policy, effectively weakening the 2010 health care law as Republicans pursue full repeal.
“We pointed out that the experience of insurers in the new exchanges would likely lead to them demanding much more in returns from the program than they were putting into it. That prediction has turned out to be true,” said Tuesday’s letter, distributed the political arm of the conservative Heritage Foundation and signed by, among others, the Club for Growth, FreedomWorks and Americans for Prosperity.
In October, the administration said plans would receive only 12.6 percent of what they thought they’d get in 2014 risk corridor payments, the result of a sicker-than-expected customer base across the new marketplace.
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Already, the lower-than-anticipated payments appear to have doomed several of Obamacare’s co-ops — nonprofit plans that were supposed to give consumers a leg up in a marketplace dominated by corporate players.
For over a year, Obamacare critics such as Sen. Marco Rubio, Florida Republican and a presidential candidate, blasted the risk corridors and similar risk-adjustment programs as “taxpayer bailouts” for Mr. Obama’s signature domestic achievement.
Now, Republicans accuse the co-ops of setting their prices too low and then expecting taxpayers to rescue them, while Democrats say the GOP choked off the nonprofit plans in their infancy by dictating changes to the risk corridors.
Obamacare’s supporters say Republican lawmakers should be giving the co-ops a helping hand, and not speeding their demise.
Meanwhile, the Health and Human Services Department is reminding insurers that it can make up the shortfall in 2014 payments over the next two years, and that it would seek money from Congress if things do not improve after the 2016 plan year.
In a memo last week, HHS said it would “explore other sources of funding for risk corridors payments, subject to the availability of appropriations.”
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“This includes working with Congress on the necessary funding for outstanding risk corridors payments,” it said.
The administration is unlikely to find a willing partner, however, as conservatives Tuesday urged GOP leaders to double down on its opposition to the program.
“Eliminating the Risk Corridor program’s ability to do this represents a major blow to the law and a step towards increased transparency in Obamacare’s exchanges,” they wrote.