Obamacare's risk-adjustment program is forcing smaller health insurers and some of the remaining co-ops to pay higher charges, Modern Healthcare has reported.
The program is designed to take away money from health insurers with healthier enrollees and shift some of the funds to health insurers with sicker enrollees.
According to data from the Centers for Medicare and Medicaid Services, reinsurance payments will total $4 billion in 2016, and there will be 445 insurers who will receive some of the payments.
Some of the co-ops created under Obamacare will owe millions in risk-adjustment payments.
"For calendar year 2016, the CMS said Evergreen must pay $9.4 million in risk-adjustment payments, though it will receive $2.5 million from the reinsurance program," the article states. "Minuteman will have to pay $25.4 million in risk-adjustment payments, and New Mexico Health Connections will pay $8.9 million."
Land of Lincoln Health, which closed their doors, owes $21.7 million in payments and Healthy CT, a co-op still in operation, owes $8 million.
"Several small plans and co-ops formed under the ACA have sued over the risk-adjustment formula," the article states. "Evergreen Health co-op in Maryland, for instance, sued in June 2016 to block the federal government from requiring it to pay millions in risk-adjustment charges. Co-ops New Mexico Health Connections and Minuteman Health of Massachusetts filed similar suits last year."
While the smaller health insurers are struggling with these million-dollar payments, large health insurers like Blue Cross and Blue Shield are incurring gains from the program.
"Blue Cross and Blue Shield of Florida will rake in $615.7 million in risk-adjustment and reinsurance payments combined—the largest amount out of participating insurers," the article states. "Blue Shield of California will receive a whopping $572 million, Anthem Blue Cross of California will receive $476.3 million, and Blue Cross and Blue Shield of North Carolina will get $264.6 million in risk-adjustment and reinsurance payments."