In contrast to many other insurers, ACAP member health plans primarily participate in the low-margin Medicaid market and rarely participate in the higher-margin large group employer market. As a consequence, ACAP insurers generally cannot offset large losses with profits from other markets. Further, as community-centric plans committed to serving vulnerable people, ACAP member plans are integral parts of their community’s fragile “safety net.” Non-payment of risk corridors, therefore, not only threatens the viability of some ACAP member plans, but also threatens damage to the safety net serving our nation’s poorest and most vulnerable people.
For ACAP members, the availability of the risk corridors program was crucial in their decision to participate in the exchanges. This was exactly what Congress intended when it enacted the risk corridors as part of the ACA. As a result, the government’s attempt to eliminate more than 90% of the scheduled risk corridors payments would result in severe economic hardship for many ACAP members, and financial ruin or bankruptcy for some. That is not how the statute works. Amicus submits this brief to explain why.