Federal payments to insurers are far exceeding collections under the ACA.
Blue Cross and Blue Shield of North Carolina (BCBS) became the latest healthcare insurer to sue the government for promised payments, as the Affordable Care Act (ACA) continues to face mounting legal battles and funding shortfalls, according to the Wall Street Journal.
The suit, filed in the United States Court of Federal Claims in Washington, D.C., alleges the government has failed to meet its obligations to the company and is owed as much as $147 million in payments. The money is due from a part of the ACA legislation, known as “risk corridors,” that was originally planned to lower the risks to insurers by entering into the new ACA insurance markets.
BCBS is saying the government is in violation of the law as well as its contractual obligations to the company, and comes on the heels of similar suits filed by Highmark Health last month, and another filed in February, by Health Republic Insurance Company. The latter is seeking class-action status.
Experts say this will likely lead to more such suits by other healthcare insurers, as they seek to unburden themselves from significant losses being racked up by the firms with the ACA plans. BCBS of North Carolina says it has lost over $400 million from the ACA plans in just 2014 and 2015, and the lack of payment by the government has added to the issue.
Initially, the government said the program would provide the money to insurers that were experiencing financial losses because of the plans by collecting monies from those insurers that were doing well financially. But, so far, the amount the government owes has exceeded the amount it has collected.
Last fall, the Department of Health and Human Services (HHS) said they would only be paying out 12.6% of the money claimed by the insurers in 2014, but promised to pay more at a later date. The suit alleges the department officials initially implied payments would be made even if there were collection shortfalls, but later said the program would be “budget neutral.” The 2014 spending bill passed by Congress reinforced that stance.
The suit is asking for the $147 million the company says it is owed, minus the $18 million it has already received, along with payments for interest and legal fees.
BCBS of North Carolina expects the 2015 payment to be around $175 million, and is asking the court to force the government to make all future payments, as outlined under the wording in the 2010 legislation.