$5.5B 'bailout' for insurers included in 2015 budget

Republicans say government, taxpayers will foot cost of ACA's risk corridor provision

Insurers could gain $5.5 billion next year to cover losses caused by the Affordable Care Act. The money would come from President Obama's 2015 budget and would help insurers that end up with more older, sicker consumers than younger enrollees.

The ACA's risk corridor provision requires insurers with profits from their reform business of at least 3 percent to contribute some of their gains into a government-controlled fund. And insurers whose claims cost at least 3 percent more than their premium revenue can withdraw from that fund, Bloomberg reported.

Republicans are calling it a bailout of the health insurance industry, saying that the federal government, and ultimately taxpayers, would be responsible for some of the payments, reported The Hill's Healthwatch.

Such concerns led Sen. Marco Rubio (R-Fla.) and Rep. Tim Griffin (R-Ark.) to sponsor a bill that would have repealed risk corridors.

But a spokesperson for the Office of Management and Budget told Healthwatch that the U.S. Department of Health & Human Services would operate the program in a "budget neutral manner, with payments in equaling payments out."

Insurers may welcome such a bailout, especially since enrollees in plans sold on the health insurance exchanges have skewed older, with young adults accounting for just 24 percent of sign ups.

The budget also includes $77.1 billion in discretionary spending for HHS, including $1.8 billion to maintain HealthCare.gov, the Fiscal Times reported.

To learn more:
- read the Bloomberg article
- see The Hill's Healthwatch article
- check out the Fiscal Times article

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