Lawmakers balk at risk corridors

January 17, 2014

One of the three R's is under scrutiny

Sen. Marco Rubio (R-Fla.) and Rep. Tim Griffin (R-Ark.) are introducing bills in the Senate and House to repeal the rule under the Affordable Care Act (ACA) that creates risk corridors in the exchange marketplaces.

Even though insurers themselves contribute to the fund that helps equalize risk during start-up years, the lawmakers believe the government’s share is a burden on tax payers and they have some support, according to The Hill.

While risk adjustment is a permanent feature in the exchanges, risk corridors and the reinsurance mechanism are temporary and help prevent the so-called “death spiral,” which could drive an insurer out of market if it ended up with a disproportionate share of high-risk enrollees.

"The ACA's risk management programs are intended to protect consumers by helping to create a stable marketplace environment during the initial years of the law's implementation,” Clare Krusing, spokesperson for America’s Health Insurance Plans, tells MHE.