The Obama administration issued a new rule Friday opening up the possibility of spending even more money on a bailout for insurance companies that took the risk to work with Obamacare exchanges.
Midway through a filing from Obamacare administrator the Centers for Medicare and Medicaid Services, the administration addresses worries that the current risk corridor funding they’re collecting for any insurer bailout may not be enough to cover insurers’ losses.
“We appreciate that some commenters believe that there are uncertainties associated with rate setting, given their concerns that risk corridors collections may not be sufficient to fully fund risk corridors payments,” the rule reads. “In the unlikely event of a shortfall for the 2015 program year…HHS will use other sources of funding for the risk corridors payments, subject to the availability of appropriations.”
Risk corridor payments are currently fees collected from all insurers participating in the exchanges that will be doled out to any insurance company who suffers losses due to an exchange population that’s sicker and more costly to insure. The program was meant to stabilize premiums and prevent insurance companies from charging exorbitant rates due to the risky proposition of joining the new exchanges.