Don’t Force Taxpayers to Bail Out Health Insurance Companies

Both the House and Senate versions of the budget reconciliation bill moving through Congress would repeal several key provisions of the Affordable Care Act (ACA). ACA’s so-called “risk corridors” were one of the provisions the Senate majority attempted to repeal though failing on a point of order. The reconciliation process will continue to feature a larger debate about the ACA that is unlikely to change many minds. But while the parties remain at loggerheads over the ACA as a whole, they nevertheless retain certain joint responsibilities concerning the law. One of them is to prevent the ACA’s risk corridors from becoming a taxpayer-financed bailout of health insurance companies.

Congress has multiple options at its disposal to prevent the risk corridor program from being expanded into a general insurance industry subsidy: (1) total repeal of the risk corridor provisions; (2) restrict the use of funds to operate the program; (3) clarify budget neutrality; (4) require any companies that receive payments under the risk corridor program to repay the federal government by a time certain (with appropriate interest); (5) CLASS-style actuarial certification; (6) require separate periodic reports from CBO on current and projected claims via the risk corridors, in comparison with prior estimates; and (7) implement disclosure requirements for recipient health insurance companies.

The ACA’s risk corridor program is and will remain at least somewhat controversial. It is not yet as controversial as an insurance company bailout would be. Lawmakers on both sides of the aisle have a shared interest in preventing that from happening.

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