The Administration continues to move the goalposts on its so-called “bailout” of insurers which lose money in ObamaCare’s exchanges. Formally, this is labelled “risk corridors”, and describes a process by which the Administration will take money from insurers which profit more than expected in the exchanges, and transfer it to those insurers which lose more money than expected.
Unfortunately, taxpayers are at risk because the revenue coming into the risk corridors is determined by premiums, whereas the payouts are determined by medical claims. If, overall, the insurers charged premium that are too low, the risk corridors will suffer deficits. This blog has covered the risk corridors thoroughly, and we expect that there will be a significant deficit. Our latest entry on the topic questioned the Administration’s assertion that the risk corridors would be budget neutral.