Obama meets with insurance CEOs, admits ACA has not been “without challenges”

Obama meets with insurance CEOs, admits ACA has not been “without challenges”

Obama meets with insurance CEOs, admits ACA has not been “without challenges” President Obama met with top executives from the health insurance industry Monday, amidst continued effort by the federal government to amend the Affordable Care Act’s troubled risk corridor program and boost overall enrollment.

The meeting was attended by senior officials with more than a dozen insurance companies, including Humana CEO Bruce Broussard and David Cordani of Cigna, as well as Health and Human Services Secretary Sylvia Mathews Burwell and advisor Valerie Jarrett.

By joining the group, Obama hoped to “underscore the importance of continuing the work that has helped bring the insured rate to the lowest level on record” as well as to solicit ideas on “how to strengthen the marketplace,” a White House official said.

In conjunction with the meeting, the president sent a letter to every insurance company offering exchange plans in the coming year to “emphasize the Administration’s commitment to working with them, discuss recent actions to further strengthen the marketplace, and ask for their help in signing up uninsured Americans.”

“We know that this progress has not been without challenges,” Obama said. “Most new enterprises have growing pains and opportunities for improvement. The marketplace, while strong, is no exception. Time and experience will help drive that improvement, as well constructive policy changes.”

One of those “constructive policy changes” is likely the rule proposed in late August making changes sought by insurers to the risk corridors program, which redistributes money from insurers with healthier enrollees to those with sicker, more expensive ones.

The rule, currently in a comment period, adjusts the formula to include prescription drug data as a source of information about enrollees’ health. It also includes new protection for insurers with especially high-cost enrollees, stipulating that costs above $2 million for any one individual will be shared among insurers.

More recently, HHS has said it anticipates that all risk corridor funds collected during the 2015 benefit year will go toward paying the outstanding amounts owed to insurers during the 2014 benefit year, in which insurers who were owed money through the program received just 12.6% of their expected payments.

Collections from the 2016 benefit year will also go toward the 2014 payments before the 2015 and 2016 payments, the HHS said.

That shortfall has been blamed by several nonprofit insurance cooperatives for their failure in the ACA marketplace. After planning on a certain payment from the federal government, the insurers say they were caught unaware and unable to make ends meet when Congress pulled funding from the program. Many have since sued the government over the payment shortfall.

The HHS bulletin, posted last week, suggests the government may be open to settlement discussions, said Butler Rubin attorney Ursula Taylor.

“I think the government wants to pay and is feeling pressure to pay in order to help stabilize the exchanges,” Taylor said. “I do not believe the Obama administration will be willing to go so far as to pay lawsuits that have not been brought or at least demanded, and the language used here confirms that suspicion.”

Taylor added that the DOJ has never disputed that payments are owed, and that the government understands the program is key to the ultimate success of the Affordable Care Act.

Enrollment for the new season begins November 1.

Related stories:
Are Obamacare insurers in for a $5 billion windfall?
Fed’s response to ACA withdrawals could have negative credit implications for insurers: Report