Blue Cross Blue Shield urges Congress to protect ObamaCare insurer fund

Blue Cross Blue Shield urges Congress to protect ObamaCare insurer fund

Blue Cross Blue Shield is lobbying Congress this summer to protect an ObamaCare insurer fund that Republicans have called a “bailout” for companies.

The corporation — which insures more than 100 million people nationwide — is distributing a memo to lawmakers warning against some GOP attempts to block the money from going to insurers this fall.


“Recently, some are proposing to stop the scheduled 2016 reinsurance payments to health plans, claiming these payments are a ‘bailout,’ ” the company wrote in the memo, obtained by The Hill. “This would result in higher premiums and less choice for consumers,” it reads.

Blue Cross Blue Shield did not return multiple requests for comment. 

The reinsurance program was created under ObamaCare as a form of life support for insurers like Blue Cross Blue Shield that saw an influx of "high-risk" patients after the massive shake-up of the marketplace.

Each insurer pays into the program, and then payments are made each year to those with the bigger losses. Nearly 500 insurers paid into the pool last year, with nearly all receiving some money back from the pool of around $1.8 billion.

The fund has been attacked as a “cash grab” by Americans for Tax Reform and an “unaccountable bailout” by Freedom Partners.

Reinsurance is one of three programs under ObamaCare intended to help shield insurers from higher costs in the new marketplace. Those efforts have regained attention this year after major insurers like Aetna and UnitedHealthcare decided to pull out of the exchanges in some states, citing financial losses.

While the reinsurance program is slated to end in 2017, some Republicans have pushed legislation this year to block the final round of payments. That money is expected to be distributed next summer for coverage in 2016.

Critics point out that the Obama administration was supposed to pay some of that fund to the Treasury Department as a fee, but those payments have not been made.

The criticism has come from Sens. Ben Sasse (R-Neb.) and Ron JohnsonRonald (Ron) Harold JohnsonDemocrats torn over pushing stolen-election narrative These Senate seats are up for election in 2022 I'm furious about Democrats taking the blame — it's time to fight back MORE (R-Wis.), who wrote to the Obama administration in July demanding to know why officials were “prioritizing payments to insurance companies” over the Treasury.

In its memo, Blue Cross Blue Shield argues that the reinsurance program isn’t a bailout because it doesn’t involve federal funds and that the payments to each insurer have been less than expected.

Under ObamaCare, health insurers were expecting a reinsurance pool of about $10 billion in its first year. The actual amount was about $8.7 billion, according to the Centers for Medicare and Medicaid Services.

The memo also specifically calls out the Sasse and Johnson letter, which says that the Treasury Department is owed $5 billion under the reinsurance program.

Blue Cross Blue Shield points out that the $5 billion in owed payments refers to a “completely separate” program, called the Early Retiree Reinsurance Program, which ended in 2012.