Say It isn't So ! Another Obamacare "Glitch".

Highmark, the insurance arm of Pittsburgh-based nonprofit Highmark Health, is suing the federal Government for $223 million, it says the Governemnt owes under the "Risk Corridor" provisions of The Obamacare.

In its complaint, Highmark argues that the U.S. government is obligated to pay the full amount owed under the risk-corridor program, on an annual basis, under the language of the ACA and because of contracts signed with insurers offering plans through the law’s marketplaces.

At the heart of the suit are the details of the risk-corridor program, which was supposed to help limit insurers’ losses, using payments collected from other insurers that did relatively well on the new ACA business.
Highmark says federal officials initially said these payments would be made in full even if the amount owed was greater than the amount collected from other insurers.
But later, Highmark’s suit says, federal officials said the program would be “budget neutral,” meaning that it would pay out only as much as it collected.
Language in a 2014 congressional spending bill reinforced this stance.

In the end, insurers requested approximately $2.87 billion in risk-corridor payments based on their 2014 results.
But only $362 million came in from other insurers. The Department of Health and Human Services has said that as more money comes into the program in future years, it will be paid out to backfill the shortfall for the 2014 allotment.
[boldface added - DD]
Ref: The Wall Street Journal

It seems the Government underestimated losses to be incurred by some insurers and overestimated "excessive" profits of other insurers intended to cover those losses in 2014. That is one of the reasons The Obama could say The Obamacare was revenue neutral, . . . i.e. lie.

In the old days of con-artistry such activities would've been referred to as a "swindle" or a "confidence trick"; nowadays it would be called bait-and-switch - the Government "initially" promises to reimburse the insurance company "players" fully for any losses they might incur, . . . "but later" finds a way to weasel out of the obligation, . . . and only pay 12%.

* DonDiego notes this lawsuit is based on 2014 reimbursement; DonDiego does not know what monies were available in 2015 and will be available in 2016 to cover losses in those years.

* If the insurers who lost money expecting reimbursement are not, in fact, reimbursed DonDiego would not be surprised if they quit playing The Obamacare Game altogether. How sad.

Did someone say weasel?

This is just what happens when "liars" figure! But, we gotta pass it to see what is in it. January won't come quick enough for me on "change" President. Experiment gone bad 2.0

Speaking of weasels, I see that Billy is again attempting to change the subject. How interestingly predictable.

For the interested reader, if any, here is the link to the story behind forkushV's headline:
NYT 15 Dec 2015

Sometimes a headline jes' ain't enough.

The Obamacare Law had a provision designated the Risk Corridor, a name likely selected because on its face no one knows what it means, so how could one object.
Basically what the Risk Corridor was intended to do was reimburse Obamacare insurance companies which lost money, presumedly because they underestimated the "risk" and underpriced their policies. The money was to come from a pool comprising "extra" funds contributed from the profits of those companies which made money. This "distribution of wealth" was scheduled to last only 3 years because by then every company would be profitable or out of the market, . . . OR NOT.
[An aside: DonDiego asks the readers to consider the implications of such a policy. If one enters the Obamacare Market and one operates a quality insurance operation based upon good research, quality personnel, competent management, et cetera, . . . and one makes a profit, a portion of those profits will be set aside for those who failed to run a quality insurance operation and lost money.
DonDiego notes this has the smell of "From each according to his ability; To each according to his needs", but back to the facts.]
As it turns out some companies lost a lot of money, . . . more than the profits of those which made money. So The Obama began to make up the excessive losses IAW the Risk Corridor provisions, but with Federal Funds, NOT IAW the Risk Corridor provisions of using excess profits. And The Obamacare minions running the program "promised" the money-losing insurers they'd get their money, . . . and apparently even wrote this promise into Contracts with the insurers.

Senator Rubio passed legislation requiring The Law be followed, and risk corridor payments be funded solely from insurer profits, . . . not unauthorized additional Federal funds.
[Apparently operating IAW The Law "Undermined" Obamacare. DUH !]
As a result, the Obamacare minions running the program began to take back their promise to fully cover the losses of Obamacare Insurers so as to operate IAW The Law.

When Highmark realized, 2 years after the fact, they'd only be receiving 12% of their losses back, they sued. DonDiego would not be surprised if other insurers in similar position also sue. The basis for the suits will undoubtedly be: "They promised. They promised." And, indeed, if They included the Promise in the contracts the US taxpayer may, in fact, end up paying for all the losses.

[An aside: Who'd've ever imagined that an Insurance Program, which many opponents during the debate over the legislation suggested would not be self-sustaining, would be supported by unauthorized promises of reimbursement of losses and subsequently put hundreds of millions, . . .pr'bly billions before it's over, . . . of taxpayer dollars at risk of being distributed to incompetent insurance companies?
Umm, . . . maybe poor old DonDiego, for one.]

DonDiego asks the reader to think.
The Government offers a program for insurers to participate in. It's a good cause, insuring the uninsurable, so why not. And besides if one loses money the Government promises to make up any losses.
Why would an incompetent insurer not participate? Management and stockholders'll do OK with the extra revenues no matter what happens. One cannot lose.

"From each according to his ability, to each according to his needs" usually, . . . may DonDiego say "always", . . . results in more folks with needs showing up than folks with ability.
Senator Rubio put an end to at least some of the unauthorized Government giveaway; this should put an end to the payment of unauthorized funds. And likely the departure of incompetent Obamacare insurers. [n.b.DonDiego employs the term "incompetent" thereby giving those seeking Government reimbursement the benefit of the doubt; it may be they were just playing the Obamacare Game to get some of that money available for failing to operate a competent insurance operation all along.]


Maybe "insuring the uninsurable" just doesn't work without losing a lot of money. Just recognizing this possibility is a good thing. Maybe those who propose to do so should just lay out the reality and the facts and see if the citizenry supports it, . . . or not.
[DonDiego supposes the citizenry does not support it, which is why a complex, misunderstood scheme promising something for nothing, like Obamacare, was necessary. But hey, . . . it's looking like Socialism is gaining traction in the good ole USA, . . . it might happen some day.]

I saw this article and had meant to post it because the first thought I had will be how fast will all these co.s get out of the healthcare biz if the govt. isn't going to hold up their end.

Maybe those in Congress should have actually read the bill before they passed it.

Fools

Looks like NY is heated for 17% increase in their rates.

Pointing to another Obamacare Flaw (created by Republicans) without articulating an alternative? Wow - what an intelligent discussion. And its the same one that's been had on Capital Hill since 2010.

Thoughtful people might demand their leadership articulate a better solution to healthcare - especially when their leadership owns both houses of Congress and possesses the ability to (a) form their own healthcare committee (b) craft their own bill (c) score their plan with the CBO (D) present it to the public and run on its merit in a presidential campaign.

Thoughtful people might wonder why it is the entire Republican establishment has completely rejected this approach for the last 8 years. Wouldn't it be nice if the public could have multiple solutions to an issue and use a voting booth to choose which solution they prefer most? Bah! Whatever. Republicans have given their base something far more incentivizing - Bengazhi....and Email-gate......and plenty of Obamacare propaganda to motivate people to start conversations like this thread.

This "flaw" was purely a Democrat creation, . . . not a single Republican voted for The Obamacare. [n.b.Perhaps the term "pure" is too strong; 2 Independents also voted for The Obamacare, one a Socialist.]

The specific flaw under discussion was including a "risk corridor" provision in the Law to cover losses of money-losing participating insurers solely with contributions from the participating money-making insurers. This provision was created by The Obama and his Democrat Team.

The "flaw" was accompanied by at least two miscalculations:
1. Misjudgment of Participating Insurers
Now even a wise Simian, not quite evolved to the full stature of a homo sapiens, might have been able to foresee that a multi-billion-dollar piece of legislation guaranteeing no losses to those choosing to participate might attract lots of businessmen, even incompetent businessmen and incompetent administrators of non-profit organizations taking advantage of The Obamacare, who recognized the benefit of a "no-lose proposition": i.e. THEY COULD NOT LOSE !
But those who crafted and passed The Obamacare did not foresee it. Or perhaps they just heeded the suggestion of Speaker of the House Nancy Pelosi [D-CA] "We Have to Pass the Bill So That You Can Find Out What Is In It", and didn't bother to read it.
2. Misjudgment of Participating Citizen-Customers
Those who crafted and passed The Obamacare did not foresee that those first to apply for The Obamacare Insurance would be older and sicker than the overall uninsured population. [n.b. see immediately above as to the reason they may have failed to do so.]

The result was The Obamacare, which had been sold to the citizenry as revenue neutral was, in fact, revenue negative.

__Fortunately for the taxpayers, The Obamacare required that the source of funds for the risk-corridor payments was solely a portion of the profits of the successful insurers.
__Unfortunately for the taxpayers, when the losses exceeded the funds available from the successful insurers The Obamacare administrators just started paying the money-losing investors out of General Federal Funds.

The Republicans addressed this apparent oversight with legislation prohibiting the practice, which was not supposed to ever happen in the first place. [n.b. DonDiego gives The Obama Administration the benefit of the doubt that paying the losers was an "oversight" and not willful misappropriation of Federal Funds.]

That is, the Republicans corrected the flawed administration of the Law, which had been at the taxpayers' expense.

pjstroh should be pleased that this unfortunate situation has been corrected.