Obamacare Risk Corridors

This corridor is blocked

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This is the third part of an update of what is going on with Obamacare.

On Thursday, we discussed why – without states expanding Medicaid and without approving the use of more physicians assistants and nurse practitioners- the ability to provide health care to rural America is a difficult task.

Friday, we addressed the UnitedHealth claim that Obamacare is costing them money.  As they make record profits.  And, decided that the bulk of their Obamacare offerings should be in rural America.  Where the cost ratio is upside down.

Today, we’ll update an older Obamacare series, where we discussed the non-profit coops and risk adjustment.  As you may recall,  The Senate (Rubio claimed it was his idea- which it wasn’t) refused to allow the program to fully reimburse those firms on the wrong side of the claims ratio.  (Since taking on a slew of new insured involves many unknowns, the PPACA process said that those who were on the upside of the ratio would reimburse those on the downside of the ratio.  And, if there wasn’t enough money from the upside firms, the government would ante up the rest.  Until the Senate alteration of the program.)

riskcorridor

 

Now, comes some of the feedback.  Back after Obamacare was passed but not yet offered to US citizens, hospitals and insurance companies were looking to take over physician practices. That meant they could control the patients- and the costs.  (This is still going on—Friday post mentioned Anthem’s takeover of Cigna, and Aetna’s acquisition of Humana health.) One of the consolidations I discussed previously was Highmark- the largest health insurance firm in Western Pennsylvania.

Highmark claims it is owed some $ 223 million (ok, it did receive $ 27 million of that total) for its “risk corridors”; the losses involved when they took on a slew of new patients for set fees without regard to potential risk.  It also claims it lost $ 85 million in 2015 on total revenue of  $ 17.7 billion. (This makes Highmark about  10% the size of UnitedHealth, the firm whose finances we analyzed on Friday.)

If you remember (of just reread) the 2015 post (risk adjustment link in paragraph 3 above), you know that the Senate approved bill meant that the risk corridor payments would only be 12.6% of the promised amounts.  And, Highmark is suing for the other 87.4% in the US Court of Federal Claims (DC).  Which means there are now two cases in this court- Health Republic Insurance Company is the other one, and it is trying to get its case classified as a class-action.

Any other bright ideas our non-functional Senate has to offer America?

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