Letters to the Editor

Changes to ‘risk corridor’ left insurers little choice

The article by Paul Hampton in the Sun Herald (June 28, 1A) was a thorough guide to what could await Mississippians if the Republican Senate can muster 50 votes on its version of a health care bill. However, there is a rarely publicized fact about the primary reason for rising coverage rates for ACA policies and reduction of insurers in the exchanges.

An original provision in the ACA called “risk corridor” was intended to protect insurers from financial losses during the first decade of the ACA. Its intention was to encourage companies to enroll in the exchanges and take on the risk, shared by government, of enrolling new insureds. If a company ended up with too many new sick people on the rolls and too little cash from the premiums to cover its medical expenditures, the “risk corridor” provision enabled the government to pay the insurer funds to cover these expenditures. The insurers relied on these payments when initially pricing their plans.

But the Republicans embedded an amendment to this provision in the annual federal budget. This amendment severely limited the amount the government could pay out. These payments were intended to stabilize the market and protect consumers. It was not a “bailout” as has been falsely circulated. When insurers could not rely on the government to meet these obligations, they had little choice but to withdraw from exchanges or raise prices considerably. Others claimed bankruptcy. These nefarious actions have harmed people’s abilities to obtain needed coverage.

Gerry Gilbert