A Federal Judge has ruled that Long Beach insurer Molina Healthcare is owed $52 million in risk corridor payments.
The risk corridors program was created to help insurers participating in the Affordable Care Act’s (ACA) health insurance exchanges. Under the program, the Department of Health and Human Services would collect payments from insurers with lower-than-expected claims on the exchanges and pay those insurers with higher-than-expected claims.
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Last week, U.S. Court of Federal Claims Judge Thomas Wheeler concluded that the government “is liable for its breach of a statutory and contractual obligation to make full annual payments to insurers who participated in the risk corridor program.”
Becker’s Hospital Review reported that Judge Wheeler’s decision echoes a previous ruling he issued last February for Moda Health. He determined that the government must pay Moda Health $214 million under the risk corridors program.
Judge Wheeler’s latest decision offers a much-needed break for Molina. The insurer posted a $230 million net loss in the second quarter of 2017. Just last week, Molina announced its plans to withdraw from the ACA exchanges in Utah and Wisconsin. The insurer also noted its poor performance in Florida and Washington State, and is planning to increase its premiums next year for its remaining ACA marketplace plans by 55%.
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