Insurers Dropping Out Of Affordable Care Act

President Obama signs Affordable Care Act

Insurers Dropping Out Of Affordable Care Act

The Affordable Care Act has been hotly contested since President Obama signed it into law in March of 2010. Despite the monumental efforts of Republican lawmakers, speeches by Tea Party members, and even Supreme Court cases it may be a small rider inserted into a 1,603-page spending bill passed in 2014 that brings it down.


Risk Corridors

That rider prohibits the Department of Health and Human Services (HHS) from tapping other accounts to fund an obscure program in the Affordable Care Act known as “risk corridors.” The risk corridors program was designed to be a temporary stopgap against high insurance claims during the first three years of the new federal program. If an insurer had more expenses than it planned, the federal government would cover the remaining balance using cash collected from companies that paid out fewer claims than expected.
According to Tim Jost, a healthcare law professor at Washington and Lee University, “I think this is one of the most effective things they’ve [Republicans in Congress] done so far in terms of trying to undermine the Affordable Care Act.”

Insurers Drop Out

This fall, more than a dozen health insurers representing 800,000 people have dropped out of the ObamaCare exchanges, many out of fear that the administration no longer has the cash to cushion their losses in the costly early years of the marketplace.
More than a dozen start-up insurers known as co-ops announced they’d be shutting their doors, in most cases because they lacked the cash flow to stay solvent. And at least two other insurers — WinHealth Partners in Wyoming and Moda Health in Washington state — pulled out of the exchanges.
The nation’s largest insurer, UnitedHealthCare, specifically mentioned the specter of a funding shortfall last week when it threatened to end its participation in the exchanges after 2016.


Here at AWS we are watching these developments closely and will keep you informed of any changes. Make sure that you check our blog frequently so you can stay updated on this developing issue.
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