Initially, it was unclear how HHS would alter the program to feed more money to insurers. The text of Obamacare makes clear the payment formula for the risk corridors program: If an insurer’s losses are 103 percent to 108 percent over the target amount, the federal government would absorb half of those losses — and for losses that exceed 108 percent, the government would cover 80 percent.

But as University of Michigan law professor Nicholas Bagley explained in a post at the health care blog the Incidental Economist, though the payment formula itself is laid out clearly in the law’s text, HHS regulators are given discretion as to what qualifies as a “loss” to insurers for the purposes of the program.

Insurers are allowed a certain amount of profit and administrative costs relative to what they pay out in claims. In regulations issued Nov. 25, HHS proposes using this discretion to allow insurers to claim more profit and administrative costs in states that have gone along with Obama’s administrative fix on cancelled plans.

HHS declined to provide a cost estimate of the rule change. “Because of the difficulty associated with predicting state enforcement of 2014 market rules and estimating the enrollment in transitional plans and in (Qualified Health Plans) we cannot estimate the magnitude of this impact on aggregate risk corridors payments and charges at this time.”