The insurance division of Pittsburgh-based Highmark Health is pressing a $223 million lawsuit against the federal government, seeking partial reimbursement of a vast sum it lost on the ObamaCare exchanges, plus interest and legal expenses.
“Officials say Highmark lost more than $260 million in 2014 and $773 million last year. The suit seeks payment for 2014 and promises of the same for 2015 and 2016,” the Associated Press reports.
The Wall Street Journal elaborates that this lawsuit concerns “violations of the mandatory risk corridor payment obligations” created by the Affordable Care Act.
Risk corridors were the provision of ObamaCare that we were assured, loudly and repeatedly, would not become a taxpayer bailout program for big insurance companies. In theory, highly profitable insurance companies would finance a cushion for those who lost big money.
Congressional Republicans called the Administration’s bluff and legislated that risk corridor payments could only be made with money collected from the insurance industry, not taxpayer revenues, effectively welding the bailout pipeline to the Treasury shut.
The Obama Administration tried playing a double game, quietly assuring its partners in the insurance industry that their losses would be covered, while assuring the American people that their tax money wouldn’t be used for the risk corridor program.
The size of the raid on taxpayers blocked by Congress is staggering. “Insurers requested approximately $2.87 billion in risk-corridor payments based on their 2014 results,” the Wall Street Journal writes. “But only $362 million came in from other insurers. The Department of Health and Human Services has said that as more money comes into the program in future years, it will be paid out to backfill the shortfall for the 2014 allotment.”
The Department of Health and Human Services has said that only 12.6 percent of risk corridor claims would be paid for 2014.
With ObamaCare in free fall, and insurance companies bailout of exchanges across the nation, Highmark can’t be blamed for doubting those promises of shortfall repayments in future years.
These insurance companies are learning a very painful lesson in the folly of letting arrogant, dishonest socialist politicians who don’t know a single thing about medicine, or insurance, seize control of a gigantic industry.
ObamaCare’s designers either radically underestimated, or lied about, the cost of covering sicker enrollees, and the amount of money they could squeeze from healthy young suckers. They also deceived their partners in the insurance industry about how much money could be siphoned from taxpayers to cover the insurance companies’ losses.
Highmark has been doing everything it can to cope with the disastrous Affordable Care Act marketplace. The Pittsburgh Tribune-Review reports that the company has “taken several measures to cut losses on the market, including raising premiums and reducing what it pays doctors to treat patients who bought plans on the federal marketplace.”
“Doctors have criticized the insurer for setting premium prices too low to cover costs of treatment. Highmark’s premiums were priced among the lowest in the nation for 2014,” the Tribune-Review adds.
And yet, they’re still going to end up needing a billion dollars or so from taxpayers to make ends meet, for just the first few years of ObamaCare. Since they can’t get it through the blocked-off risk corridor pipeline, they’re seeking it in court… with interest.
Remember when the con artists who saddled us with ObamaCare claimed it would be revenue-neutral?