Dallas, Texas (PRWEB) August 19, 2014
Two provisions in the Affordable Care Act designed to protect insurance companies from unanticipated losses -- reinsurance and risk corridors -- threaten to force taxpayers to cover those losses through 2016, according to a new study from John R. Graham, senior fellow at the National Center for Policy Analysis (NCPA).
“Taxpayers are on the hook to bail out health insurers which lose money in Obamacare’s health-insurance exchanges,” says Graham. “The law does not even limit taxpayers’ exposure, and no government agency has a credible estimate of how much taxpayers’ money is at risk.”
The Affordable Care Act imposes a number of requirements and restrictions on insurance companies, who stand to lose money if they enroll too many expensive people in their health plans. As such, the ACA established three mechanisms to backstop insurers' risks: risk adjustment, reinsurance and risk corridors.
“Right now, health insurers are pricing their offerings for Obamacare’s second year based on the Obama Administration’s assurances that taxpayers will prevent them from losing money. Removing this guarantee is necessary to ensure that health insurers bear all the business risk of participating in Obamacare,” explained Graham.
John R Graham is an experienced, Washington D.C.-based health economist available for interviews or background on national health care policy issues. Video of some of his previous interviews here: http://youtu.be/FVH0t8pYkdk.
The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. We bring together the best and brightest minds to tackle the country's most difficult public policy problems — in health care, taxes, retirement, education, energy and the environment. Visit our website today for more information.