Humana Inc. says it no longer has muchhope that it will collect $591 million in payments that it'ssupposed to get from the Affordable Care Act risk corridors program.
|The Louisville, Kentucky-based health insurer says it willrecord $583 million in adjustments, before taxes, when it reportsits earnings for the fourth quarter.
|The ACA risk corridors program was supposed toprotect health insurers against some of the risks involved withparticipating in the ACA public health insurance exchange system,by using cash from thriving exchange plan issuers to help carrierswith poor exchange results in 2014, 2015 and 2016.
|After the program started up, Congress prohibited it from usingany cash other than contributions from thriving exchange planissuers to pay program obligations. The program generated onlyenough cash from thriving issuers in 2014 to pay less than 13percent of the obligations.
|This year, program managers at the Centers for Medicare &Medicaid Services said any cash the program collects for 2015 willgo toward paying the 2014 obligations.
|A federal court recently ruled that exchange planissuers have no contractual right to collect the programpayments.
|The company reported it has received only $30 million in riskcorridors program payments for 2014 and has heard that it might getanother $8 million.
|Humana previously included the risk corridor receivables in itspremium income total. The write-off will be an adjustment to thatincome, the company said.
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Allison Bell
Allison Bell, ThinkAdvisor's insurance editor, previously was LifeHealthPro's health insurance editor. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached at [email protected] or on Twitter at @Think_Allison.
