In this column, RISE looks at the latest news to impact health care insurers. Among the biggest headlines: Federal judges denied a request to reopen a case involving $12 billion in risk corridor payments to payers, and early reports reveal that the first association health plans are offering comprehensive benefits.
Moda Health Plan vs. United States
Earlier this month a federal appeals court denied Moda’s request to reopen a case seeking millions of dollars in unpaid risk corridor payments, but that doesn’t mean the case is over. Indeed, Robert Gootee, president and CEO of Moda, told The Lund Report that the insurer will take its case to the Supreme Court.
The case has been closely watched as it has wound its way through the legal system. At issue: Whether the U.S. government owes health insurers that offered qualified health plans through the Affordable Care Act’s (ACA) marketplace the funds from the ACA’s risk corridor statute and regulation, which were meant to offset losses during the first three years of the health insurance exchanges.
Land of Lincoln, Maine Community Health Options, and Blue Cross Blue Shield of North Carolina joined Moda in the bid to recoup the payments. The insurers scored a legal victory in 2017 when the U.S. Court of Federal Claims ruled that the Department of Health and Human Services failed to fulfill its promise to make the payments. But they received a blow when a United States Court of Appeals for the Federal Court overturned that decision in June and determined that HHS was not required to make the risk corridor payments because Congress added a budget-neutrality requirement to the program.
In early November, federal judges denied an appeal to rehear the case and said that insurers are required to absorb risk corridor costs without help from federal funds.
“Obviously we are disappointed by this decision,” Gootee told The Lund Report in a statement. “We continue to believe, as the trial court did, that the government’s obligation to us is clearly stated in the law.”
Early reports find association health plans offer better coverage than expected
Despite concerns that association health plans may be more expensive and skimpy, Modern Healthcare reports that the opposite seems to be true. Sponsors of the plans told the publication that they are able to offer comprehensive coverage as well as lower premiums than comparable plans on the individual insurance exchange. The publication pointed to Land O’Lakes self-insured association plan, which will cost approximately 25 percent less than the exchange plans in Nebraska. Laura Arp, Nebraska's life and health administrator, told the publication that the plans look a lot like what's offered on the ACA exchange.
Chris Condeluci, a health policy consultant who worked with Land O'Lakes on its plan, told Modern Healthcare that if member-based organizations offer skimpy coverage, “their members are going to leave and they're certainly not going to attract new members.”
Open enrollment numbers off to slow start
Enrollment numbers are lower this year than a similar time period last year, according to the latest statistics from the Centers for Medicare & Medicaid Services. The agency has been posting weekly updates since open enrollment began on Nov. 1.
Approximately 1.2 million consumers signed up on the ACA exchange so far compared to 1.5 million people last year.
But this is the first year since the implementation of the ACA that consumers don’t have to pay a penalty for not having insurance. Larry Levitt, senior vice president with the Kaiser Family Foundation, isn’t convinced that total enrollment will decline.
In a series of tweets, Levitt attributed the slow enrollment to several factors, including the fact that the national election diverted attention from the beginning of the ACA open enrollment, and the expansion of Medicaid in Virginia as of January 1, 2019, which will pull some lower income people out of the marketplace.
“As always, I would expect a surge in ACA signups as the December 15 deadline approaches,” he said.