The already troubled health insurance cooperatives could be in for even more difficulty.
Republican lawmaker and presidential candidate Marco Rubio announced his intention over the weekend to further defund the federal risk corridors program – a key source of financial support for the nonprofit insurers established under the Affordable Care Act.
Rubio was responsible for the congressional move last year to cut back on federal payment to the program, successfully decreasing the amount paid to each insurer to about 13 cents for every dollar promised to the co-ops. At least two chief executives of recently closed co-ops have blamed these cutbacks for their groups’ failures.
Now, Rubio says he wants to go further and stop federal support of the program altogether.
“Insurance companies are willing to be a part of the exchanges, only if the federal government promised them that when they lost money they would get bailed out – bailed out with taxpayer money,” the congressman told reporters. “We’ve taken that away. We should not be bailing out private insurance companies who hire great lobbyists.”
Rubio plans to push for this ban next year.
The effort is strongly opposed by both supporters of the ACA and health insurance trade groups. According to Clare Krusing, the press secretary for America’s Health Insurance Plans, the viability of the co-ops cannot be assured without proper federal funding.
“There is a growing recognition about the instability facing consumers in the market,” Krusing said in a statement. “Nearly 800,000 Americans have faced coverage disruptions as a result of the significant and unexpected shortfall with the risk corridors program. Congress and the Administration must act to make sure consumers are protected.”
These concerns have been echoed by chief executives with the co-ops, 14 of which have now closed their doors.
The CEO of Arches Health Plan in Utah told lawmakers in the state that the Center for Consumer Information and Insurance Oversight doomed the nonprofit insurers by pledging millions through the ACA’s “risk corridor” program only to diminish the sum when Congressional legislation scaled back support for the group.
Kentucky’s co-op leader also cited bureaucratic troubles as a trigger for financial troubles, going so far as to label the group’s failure as “a direct result of lower-than-promised risk corridor payments.”
