The Department of Health and Human Services finally released the 2015 Affordable Care Act risk corridor data. The data show the rapid deterioration of the ACA exchanges from 2014 to 2015.
The ACA’s risk corridor program was intended to transfer funds from profitable insurers to unprofitable ones for the first three years of the exchanges (2014 to 2016). The program ran a $2.5 billion deficit for the 2014 plan year as far more insurers incurred losses than made profits. In 2015, the deficit increased to more than $5.8 billion—a 132% increase.
If taxpayers are forced to bail out insurers for these losses, the total tab for 2014 and 2015 now exceeds $8.3 billion. If insurers’ experience in 2016 tracks what happened in 2015, the total 3-year risk corridor deficit will exceed $14 billion. The Obama administration has given mixed signals about whether it will tap taxpayer funds to bail out insurers for these losses. We now know just how much money is at stake.
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