ObamaCare’s Risk Corridor “Bailout” Just Got Bigger — Much Bigger
Last Friday, the Administration quietly released 280 pages of rules that, among other things, increased ObamaCare’s risk corridors:
We propose to implement an adjustment to the risk corridors formula…Such an adjustment could increase a QHP issuer’s risk corridors ratio if administrative expenses are unexpectedly high or claims costs are unexpectedly low, thereby increasing risk corridors payments or decreasing risk corridors charges. We propose to raise the administrative cost ceiling by 2 percentage points, from 20 percent to 22 percent. We also propose to increase the profit margin floor in the risk corridors formula (currently set at 3 percent, plus the adjustment percentage, of after-tax premiums). Such an adjustment could increase a QHP issuer’s risk corridors ratio if claims costs are unexpectedly high, thereby increasing risk corridors payments or decreasing risk corridors charges. We propose to raise the profit margin floor by 2 percentage points, from 3 percent to 5 percent. (p. 56)
The table below shows an insurance plan with $10 million cost target versus $11 million of allowable costs. Actual medical claims are $8.8 million. Using the formula for calculating its payout from the risk corridor, allowing 20 percent of administrative costs, the plan gets a $410,000 “bailout” (panel A). If it can add administrative costs up to 22 percent of allowable costs, the payout increases to $635,641 — an increase of 55 percent (panel B).
Related Posts:
ObamaCare Risk Adjustment: Moving the Goalposts.
The “3 Rs”: Understanding the Death Spiral in the ObamaCare Exchanges.
That’s something else. How many more things are going to be “quietly released” in the coming months?
There have been several things “quietly released” lately. It’s just not right.
So true. I didn’t think we’d still be arguing about information distribution in this day and age.
This isn’t even the original bill that was passed anymore
“280 pages of rules”
Dictatorships have rules. Democracies have laws.
That’s an important distinction
Yeah, there are not rules in society. The government has no business deciding rules for us
Disgraceful
^
It makes no sense to me that they can change a law after it was passed
Yet time and time again they have proved that they can and will
When you get to jr. high, your teachers will walk you through it. No surprise a Goodman acolyte has no conception of how law/regulations actually work.
Also I make it 5-2 Team Goodman has misinterpreted, if not outright miscalculated, the risk corridor formulae.
I can see a lack od understanding of what the risk corridors mean.
But it will not stop people from complaining about it…