Officials Warn To Be Careful Where You Buy Insurance Outside Federal Marketplace

It’s that time of the year again — time to sign up for Obamacare! Those who are currently without access to healthcare can browse through a number of plans on healthcare.gov. But health experts have warned would-be buyers looking for plans outside of the federal marketplace to watch out for the so-called “junk insurance” plans that have popped up due to new laws signed by the Trump administration. 

Those plans don’t meet the standards of the Affordable Care Act (ACA). 

The Supreme Court will soon hear a case that will determine whether or not insurers are reimbursed $12.3 billion to which they believe they are entitled. We should have an answer before the Senate goes on recess in summer next year.

According to insurer Land of Lincoln Health, the company is down over $75 million that it should have been able to recover from the risk corridor program under the ACA. 

Risk Corridors are a provision of the ACA. They “limit the risk borne by qualified health plans on the insurance marketplaces. Risk Corridors are a mechanism to minimize the year-end losses of insurers who covered a disproportionate share of sicker, often older, insured customers. The federal government, through the Department of Health and Human Services, agrees to cover 50% of the excess costs borne to insurers if those costs exceeded premiums by 3-8%.”

Land of Lincoln Health says that their monthly premiums were set low due to the provision. In addition, insurers Moda Health Plan, Blue Cross and Blue Shield of North Carolina, and Maine Community Health Options are all suing as well.

A federal appeals court has already ruled that the Risk Corridor provision of the ACA was non-binding, and that it was more of a description of what an optimal system should look like. The Supreme Court has been asked and subsequently agreed to review the previous rulings.

America’s Health Insurance Plans (AHIP) CEO Matt Eyles said, “The Supreme’s Court’s decision to hear this case recognizes how important it is for American businesses, including health insurance providers, to be able to rely on the federal government as a fair and reliable partner. Strong, stable and predictable partnerships between the private and the public sector are an essential part of our nation’s economy, and our industry looks forward to having this matter heard before the Court.”

Association for Community Affiliated Plans (ACAP) CEO Margaret Murray said, “We’re pleased that the Supreme Court has agreed to hear the case, as it gets to the heart of the concept of the full faith and credit of the United States government. We asked the appeals court in an amicus brief to affirm that the Federal government should be as good as its word in statute, and urge the Supreme Court to do the same.”