'Risk Corridor' Ruling Could Be $8 Billion Headache For U.S.

Risk corridors were set up under the 2010 health law to spread risk by collecting money from insurers with healthier populations and distributing it to those with older, sicker customers, but Republicans essentially froze funding to the initiative. A judge ruled that one insurer was owed money from the government, and others could be emboldened by the decision.

A recent ruling by a federal judge that the U.S. government must pay more than $200 million to an Oregon insurer could mean serious financial and political headaches for the Trump administration in the months to come. The decision last week by a judge on the U.S. Court of Federal Claims requires the government to pay Moda Health Plan Inc. money it said it was owed under an Affordable Care Act provision intended to cover insurers financial shortfalls. (Armour, 2/13)

In other news —

Twenty-seven employer groups asked the Trump administration on Monday to reject calls to replace the Affordable Care Act’s “Cadillac Tax” on high-cost health benefits with a plan that caps the individual tax exclusion for job-based health coverage. Premiums paid by employees for job-based health insurance aren’t taxed as income, which reduces the amount of payroll taxes and income taxes owed by workers. (Pugh, 2/13)

This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.

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