At the inception of the Affordable Care Act, the federal government guaranteed carriers a subsidy to help them offset anticipated losses from the new “guaranteed issue” enrollment rules. With no underwriting permitted, health carriers anticipated (correctly) greater losses on their book of business, and the government was willing to give them a break, except that now they are going broke (well, not broke exactly, but they are limping) In the end, insurers received payment under the “risk corridor” allowance on only 12.6% of the amount claimed. As a result, Highmark, which is the fourth largest “Blues” company, has filed suit to recover their losses, claiming they were down $222 million in the ACA market in 2014 and $590 million in 2015.
And since everyone likes a good pile on, other carriers are expected to join the suit. OK…