Last week, Blue Cross Blue Shield of North Carolina filed a suit against the federal government for not paying the insurer more than $147 million that BCBS claims the government owed under the Affordable Care Act's risk corridor program, according to Wall Street Journal.
Here are five key points:
1. BCBS of North Carolina alleges the government is in violation of the ACA's language and also violated its contractual obligation to BCBS.
2. In 2014 and 2015, BCBS of North Carolina said it suffered more than $400 million losses on the ACA. The payer attributes part of that steep loss to its reduced risk-corridor payments.
3. The government has paid BCBS of North Carolina nearly $18 million, a fraction of the $147 million the payer is seeking for the program. Additionally, the payer is seeking interest and legal expenses. In 2015, BCBS of North Carolina estimated the federal government will owe the payer more than $175 million in risk-corridor payments.
4. Last fall, the Obama administration said it would not pay insurers the full amount owed under the risk-corridor program in 2014, when the program went into effect. In 2014, the actual losses far surpassed predictions, leading the government to only pay insurers 12.6 percent of the money they initially offered. A spending law provision allows the government to only pay this portion of the claims.
5. Under the provision, the federal government paid insurers $362 million out of the $2.87 billion payers claimed for 2014.
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