Obamacare payment to insurers $2.5 billion less than expected

posted at 9:21 pm on October 7, 2015 by Kristina Ribali

Reneging on previous promises and guarantees, the federal government has decided to short insurance companies out of billions of dollars agreed to under Obamacare.

The Washington Examiner reports that, “Insurers learned late Thursday that they’ll receive just $362 million out of the $2.9 billion” they had requested from Obamacare in 2014. Why? Because Obamacare “hasn’t brought in nearly as much money as it needs to pay out.”obamacare

Unfortunately for insurance companies, they have enrolled higher numbers of older and sicker customers than anticipated. The Obama Administration promised the insurers federal funds “to help cover their costs, through a program known as risk corridors.”

Here’s how the program was supposed to work:

If a health plan found itself with at least 3 percent more medical claims than it had anticipated, the government would reimburse it for half of those losses. If claims surpassed expectations by more than 8 percent, the government would pay 80 percent of the losses.

However, “the law requires the program to be budget-neutral, meaning that if there aren’t adequate funds, insurers have to go without.” There’s the fine print that is the crux of the problem.

The response from the insurance industry  (hoping to see a boon to their bottom line under Obamacare) was harsh and swift.

“Stable, affordable coverage for consumers depends on adequate funding of the risk corridor program,” said Marilyn Tavenner, CEO of America’s Health Insurance Plans. “It’s essential that Congress and CMS act to ensure the program works as designed and consumers are protected.”

Notice the line, “stable, affordable coverage for consumers.” Many Obamacare enrollees would say that coverage has been anything but stable and affordable so far. Rates for plans offered through Obamacare are continuing to climb, and that doesn’t seem likely to change. With the loss of these expected funds to help prop up the bottom line of these insurers, further price increases in Obamacare plans are certain.

There is a ray of hope, if only a tiny one, as the Obama Administration said that insurers will “eventually” get their money.  That’s likely little consolation to insurers if the federal government’s track record is considered. One only has to look to the Individuals with Disabilities Education Act (IDEA), passed in 1975. During the years 1981-2010, states were shorted over $250 billion promised to them under the new law, but were of course still expected to comply.

With a mounting national debt of over $18 trillion, Washington’s ability to keep its promises isn’t likely to improve any time soon, and customers are likely going to continue to see higher premiums, larger deductibles, and smaller networks – exactly the opposite of what was promised under Obamacare.

____________________________________________

Kristina Ribali is the Senior Coalitions Director for the Foundation for Government Accountability. Follow Kristina on Twitter or contact her via email at [email protected]


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Comments

Sleep with the Devil.

wifarmboy on October 7, 2015 at 9:25 PM

Trusting Obama is not a sign of brilliant business mind, is it?

Rix on October 7, 2015 at 9:26 PM

That’s far less than they contributed to DogEater’s campaign and lobbying efforts to pass DeathCare …

ShainS on October 7, 2015 at 9:27 PM

You get the outcome you deserve, Big Insurance.

22044 on October 7, 2015 at 9:29 PM

Dogs and fleas.

wheelgun on October 7, 2015 at 9:29 PM

obama’s message to insurance executives.

https://www.youtube.com/watch?v=zOXtWxhlsUg

HumpBot Salvation on October 7, 2015 at 9:29 PM

It was all about getting Middle America to subsidize healthcare for the poor, and they fell for it hook line and sinker, just like Gruber predicted.

WisCon on October 7, 2015 at 9:33 PM

Reneging on previous promises and guarantees, the federal government has decided to short insurance companies out of billions of dollars agreed to under Obamacare.

…bend
over
and
like
it!

JugEarsButtHurt on October 7, 2015 at 9:34 PM

There are now only two insurers to pick from in Illinois. Blue Cross and Land of Lincoln (which is underfunded already).

*smh*

Hubby and I are holding on to our United Healthcare policy but the premium just went over $1,400/month.

A pox on every Democrat who voted for this monstrosity and a pox on the entire Obama administration.

Fallon on October 7, 2015 at 9:36 PM

Sleep with the Devil.

wifarmboy on October 7, 2015 at 9:25 PM

Precisely.

I’m a fan of free markets. But I’m not a fan of these companies that lobby the government to get favors and monopoly rights. They made their bed – and now they have to sleep in it.

Nephew Sam on October 7, 2015 at 9:38 PM

The rest of the money went to Justice Roberts!!

Deano1952 on October 7, 2015 at 9:40 PM

I’ll gladly pay you Tuesday, February 18, 2031 for Obamacare today.

I. Love. It.

Jumpintimmy on October 7, 2015 at 9:43 PM

Boy, you think someone was trying to run them out of business in order to institute single payer.

PackerBronco on October 7, 2015 at 9:43 PM

All part of the design to crash the system and lead to single-payer?

onlineanalyst on October 7, 2015 at 9:43 PM

A pox on every Democrat who voted for this monstrosity and a pox on the entire Obama administration.

Fallon on October 7, 2015 at 9:36 PM

the evil and misery that swirls around this Anti Christ in the White House will only get worse..they will continue to beat you until you submit infidel…

HatfieldMcCoy on October 7, 2015 at 9:45 PM

The Dems may ignore the citizens, but they won’t ignore pissed off insurance companies that dump millions in their coffers.

Megyn Kellys Lipstick on October 7, 2015 at 9:46 PM

We are from the government and we are here to help.

Bwaaahh.

Obamacare sphincterfant lawyers and polysci majors deserve to live in a skinner box while the devil pokes them with sharp sticks.

SpongePuppy on October 7, 2015 at 9:48 PM

Enjoy the suck, azzholes…..

Indiana Jim on October 7, 2015 at 9:49 PM

If you like your debt burden you can keep your debt burden

SpongePuppy on October 7, 2015 at 9:50 PM

This country is so freaking broke.

Not saying that these insurers deserve to get paid but this is just yet another example of how the United States is broke as a college kid with a credit card and a dedicated beer fridge.

Defenestratus on October 7, 2015 at 9:55 PM

Okay, I’m liking Kristina. She calls actual shiite, shiite, no dithering like most other HA writers.

Good write, Kristina!

Who is John Galt on October 7, 2015 at 9:57 PM

they have enrolled higher numbers of older and sicker customers than anticipated.

The deuce, you say!!

Seriously, is there one group he hasn’t screwed over?

PattyJ on October 7, 2015 at 10:08 PM

Who else sees a big stimulus coming if the next president elected is a GOPe or Democrat. Excuse me for my redundancy.

DDay on October 7, 2015 at 10:11 PM

Seriously, is there one group he hasn’t screwed over?

PattyJ on October 7, 2015 at 10:08 PM

The Iranians?

wifarmboy on October 7, 2015 at 10:12 PM

Hilarious.

Premiums must now go up exorbitantly.

Watch as Obama demonizes insurance companies who were A-OK with Obamacare.

Valiant on October 7, 2015 at 10:17 PM

PattyJ. Planned parenthood????

Indiana Jim on October 7, 2015 at 10:21 PM

Obamacare “hasn’t brought in nearly as much money as it needs to pay out.”

I’ll give ’em a pass. Who could have ever predicted such a thing?

Lolo on October 7, 2015 at 10:26 PM

The goal of Obamacare was never about improving healthcare.

It’s all about the federal government seizing 1/6th of the national economy, massively expanding income redistribution, and oh, yeah – bankrupting the health insurance companies in order to facilitate the making the VA the model for EVERYONE’s health insurance.

Athos on October 7, 2015 at 10:27 PM

The Iranians?

wifarmboy on October 7, 2015 at 10:12 PM

Have they gotten the $150B yet?

Athos on October 7, 2015 at 10:27 PM

Hee! Couldn’t happen to a nicer bunch of corrupt thieves!

smokeyblonde on October 7, 2015 at 10:29 PM

And now the death spiral begins…

You know… exactly what 6 years ago I warned my liberal friend would happen.

He told me that I just didn’t care enough about people who had pre-existing illness and couldn’t get health insurance.

Fun fact: 6 years ago I had a pre-existing illness and couldn’t get health insurance.

Yeah…

Sackett on October 7, 2015 at 11:07 PM

Lack of transparency is a huge political advantage and, basically, call it the stupidity of the American voter or whatever. But basically that was really critical to getting the thing to pass.

– Jonathan Gruber

Buttercup on October 7, 2015 at 11:16 PM

Suckerrrrs.

Jaibones on October 8, 2015 at 12:22 AM

Suck it up. The old law of unintended consequences. The Insurance companies got on board with this because the hands on their collective watches were rubbing together at the prospect of rolling in the dough.

There is a ray of hope, if only a tiny one, as the Obama Administration said that insurers will “eventually” get their money.

“Hey, we would rather owe it to you than beat you out of it!” – BHO

ghostwalker1 on October 8, 2015 at 1:10 AM

The solution is really quite simple: the insurance industry should file a lawsuit, carry it to the Supreme Court and let John Roberts rewrite the ACA to give them all the money they want.

Sheesh, you guys always want to make a big meat pie out of things…

jbspry on October 8, 2015 at 5:24 AM

OT:

I absolutely hate that photo of The Won’s signature on Obamacare. The disjointed characters that come from using 20 pens to sign it drive me crazy. When I become President, I’ll use one pen for everything. Screw all the sycophants who want to masturbate with a famous pen.

BierManVA on October 8, 2015 at 6:10 AM

Gee, I feel so sorry for these insurers who got into bed with Obama and woke up with a bad case of the clap.

World’s smallest violin and all that.

If this can’t be repealed in 2017, we will end up with single payer.

…or maybe single payer is the new “conservative,” non-GOPe, small government thing to support these days. The Trump supporters have made me lose track. Is big government socialism good or bad?

DRayRaven on October 8, 2015 at 6:18 AM

Why ask for Billions when you can get Millions……

Johnnyreb on October 8, 2015 at 7:09 AM

Stupid insurance companies, conservatives told them the death spiral would happen.

Obama was smart about one thing: he knew from Hillary’s attempt to do this in the 90s he needed the health insurance industry on the inside of the tent. The health insurance industry sponsored those commercials of the older couple bashing on Hillary’s reforms, this time the insurance companies betrayed the American people and went all in on becoming government clients.

I’ll vote against ANY Congressman or Senate who votes to give those traitors ONE THIN DIME.

MaureenTheTemp on October 8, 2015 at 8:05 AM

I’m quite sure they will never pass this on to the consumer right?

Oh wait, Gruber said they would.

NYCMike on October 8, 2015 at 8:11 AM

“Stable, affordable coverage for consumers depends on adequate funding of the risk corridor program,” said Marilyn Tavenner, CEO of America’s Health Insurance Plans. “It’s essential that Congress and CMS act to ensure the program works as designed and consumers are protected.”

However, “the law requires the program to be budget-neutral, meaning that if there aren’t adequate funds, insurers have to go without.”

Ah, but it IS working as designed.
It was designed to kill off private insurance companies to leave only the government as single payer, exactly as conservatives said.
And the law is functioning as written.
Did the insurance companies not read the fine print? They are all about the fine print.

Curmudgeon on October 8, 2015 at 8:13 AM

Americans would not support a tax on individuals, so “We just tax the insurance companies, they pass on the higher prices . . . it ends up being the same thing.” The ruse, Gruber says, was “a very clever . . . basic exploitation of the lack of economic understanding of the American voter.”

NYCMike on October 8, 2015 at 8:15 AM

Serves the insurance industry right for getting in bed with thugs and gangsters to help them push the ACA through back in 09-10.

BobM88 on October 8, 2015 at 8:18 AM

First they came for the unions, then big oil, and power, now it’s the insurance companies they’ve screwed. You’d think those smartest people in the room would start to take notice.

Kissmygrits on October 8, 2015 at 8:45 AM

So let me get this straight…

Insurance companies thought the government was going to bail them out like the banks and the car companies? Because, like Chamberlain, they were waving a piece of paper Barry signed over their heads?

I know it really isn’t funny, but here goes:

BWAHAHAHAHAHAHAHAA!

Turtle317 on October 8, 2015 at 8:56 AM

“Stable, affordable coverage for consumers depends on adequate funding of the risk corridor program,” said Marilyn Tavenner, CEO of America’s Health Insurance Plans. “It’s essential that Congress and CMS act to ensure the program works as designed and consumers are protected.”

You must be one of the stupid people. There’s never been any evidence this fraud would ever conform to the lies. It’s working exactly as predicted by everyone who didn’t buy Unicorn futures.

RadClown on October 8, 2015 at 8:57 AM

It was designed to kill off private insurance companies to leave only the government as single payer, exactly as conservatives said.
And the law is functioning as written.

Exactly. As I’ve often told my conservative friends, BHO isn’t dumb. He smart enough to know how to hoodwink the voters the low-information sheeple that pull the lever for Democrats.

He says and does things that are so outrageous that people pass it off as “he didn’t really mean that” or “what he meant was…” or “you’re just racist”. In reality, he’s done everything he said he was going to do.

Fundamentally change this country? Check.
Single-payer healthcare system? Check.
Increase government dependency? Check.
Cater to the perpetually-aggrieved? Check.
Pervert the traditional family structure? Check.

BHO told us this would happen. We were just too busy taking selfies and watching the Kardashians clown themselves to pay attention.

Get the government the sheeple deserve? Checkmate.

conservablogger on October 8, 2015 at 9:16 AM

Marilyn Tavenner, CEO of America’s Health Insurance Plans.

Isn’t Tavenner the harpy who ran CMS? Appears she jumped the fence to the insurance side and now has her drawers in a bunch. Nice.

WilDanielson on October 8, 2015 at 9:38 AM

We are from the government and we are here to help.

We are from the government and we’re not happy ’til you’re not happy.

cottontail on October 8, 2015 at 9:49 AM

Isn’t Tavenner the harpy who ran CMS?

Yep.
One and the same.
And it wasn’t so much jumping ship as it was forced to walk the plank.

ibid on October 8, 2015 at 10:27 AM

And now here comes a whole new wave of reduced coverage, increased deductibles and higher premiums.

Math is hard.

For “Liberals”.

KMC1 on October 8, 2015 at 12:12 PM

Hey, Dog-lovers, enjoy your fleas.

Another Drew on October 8, 2015 at 2:28 PM

If insurance companies are expecting sympathy, they’ll find it between shit and syphilis in the dictionary.

GarandFan on October 8, 2015 at 2:47 PM

[C]ustomers are likely going to continue to see higher premiums, larger deductibles, and smaller networks – exactly the opposite of what was promised under Obamacare.

But exactly what we who opposed the plan were predicting. Why this is news to anyone with half of a brain I’ll never know. I want a little recognition here for being 100% right!

skidword on October 8, 2015 at 7:22 PM

Found out our President and his family are covered by PRIVATE health-insurance,.. Blue Cross and Blue Shield. The American citizens pay 72 % of each month’s premium. Also found out that both Congress and the Senate have exempted themselves from “Obamacare.” I hope this little piece of information will inform the American-taxpayers that they have been “fleeced” by another group of con-artists who operate out of Washington, D.C. The primary leader of this “shell-game” is Jonathon Gruber.

Bugdust172 on October 9, 2015 at 9:59 AM