Health Affairs | Health Policy Briefs: Risk Corridors

An amendment to the 2015 federal budget continuing appropriation raises a question: Will insurers receive their full 2014 risk corridor payments?

What’s the issue?

The risk corridor program created by the Affordable Care Act (ACA) has proven to be one of the most controversial aspects of the health care law. Questions have been raised about the source of payments, whether the Department of Health and Human Services (HHS) has the authority to make payments under the program, and whether the program is required to be budget neutral.

In response to questions from the Government Accountability Office (GAO) on its budget authority for risk corridor payments, HHS cited section 1342 of the ACA, which establishes the risk corridor program and requires HHS to collect payments from and make payments to certain qualified health plans. HHS says that the fees collected and the payments made under the risk corridor program are consistent with the definition of user fees.

The fiscal year 2014 appropriation gives the Centers for Medicare and Medicaid Services (CMS) the authority to collect user fees and keep the fees available for use through the 2019 fiscal year. HHS states that this appropriation along with section 1342 gives CMS the authority to collect and distribute risk corridor payments. In an opinion issued September 2014, the GAO agreed that payments collected under the risk corridor program are “properly characterized as user fees.”

via Health Policy Briefs.

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