The latest nail in ObamaCare's coffin. "’The much-feared death spiral." https://t.co/92yXO2uYbM— AssocAmerPhys&Surg (@AAPSonline) July 25, 2016
There’s evidence of this in the latest numbers from the law’s “risk corridor” program, which is supposed to collect money from insurers with healthier customers (lower costs), and give that money to insurers with sicker customers (higher costs). For 2014, the program collected $362 million but owes $2.87 billion. For now, insurers will receive only 12.6 percent of the money they expected.
This has added to financial problems at the nonprofit member-run health plans known as co-ops. In 2014 there were 23 co-ops around the country. Today there are 11 – seven that lost money in 2015 and four that just announced they’re going out of business.
Five health plans have filed lawsuits over underpayments from the risk corridor program, which is set to end this year along with a second program that provides reinsurance. A third program for risk adjustment is permanent, although a Maryland health plan is challenging it in the courts.
Meanwhile, a federal judge ruled in May that the Obama administration is illegally giving money to insurance companies to pay for a cost-sharing reduction program that subsidizes the deductibles and co-payments of low-income people who buy silver policies on the exchanges.
In mid-2013, the administration removed the cost-sharing reduction program from its 2014 budget request and decided to pay for it with money that Congress appropriated for another purpose.
Congress has been trying for over a year to get information about the cost-sharing reduction program, but the White House has ignored subpoenas for documents and refused to make witnesses available to answer questions. An investigation by two House committees found that, to date, over $7 billion has been spent without authorization.
Despite efforts to hide it, the true cost of the Affordable Care Act is becoming clear.