Blue Cross Blue Shield will receive another $40 million from its competitors under a contested Obamacare program, a source confirmed to the Boston Business Journal.
The state is expected to release the news of the payment today. A source with knowledge of the payment confirmed that Blue Cross would receive $40 million more in risk adjustment payments for 2015, on top of the $40 million the insurer initially received.
Risk adjustment is a program under the Affordable Care Act, colloquially referred to as Obamacare, that requires insurers with healthy populations to give money to insurers with sick populations. The rule is an effort to make sure no insurer is going after only healthy — and less costly — people.
Several insurers in Massachusetts have contested the rule for the way it determines the health of an insurer’s population, and the way in which payments are calculated, saying it requires them to shell out millions of dollars to competing insurers. One insurer, Minuteman Health, has even filed a lawsuit with the federal government over the risk adjustment program.
Yet insurers like Blue Cross have repeatedly said how necessary the payments are to ensure equality in the marketplace, and that it helps mitigate the risks of operating on the open market.
In the first year of the program, for 2014, Blue Cross received the highest risk adjustment payment from any insurer, netting $51.7 million. For 2015, the insurer was allocated $40.8 million in risk adjustment payments from its competitors.
Blue Cross contested the amount when the payments were released in June 2016, and the state informed the insurer Monday night that the request would be granted. The payment correction will be made to Blue Cross out of risk adjustment payments being calculated for 2016, the source said.
The amount would offer Blue Cross a ladder out of the financial hole it found itself in as of the third quarter this year. Year-to-date through September in 2016, Blue Cross Blue Shield of Massachusetts reported a $40.4 million operating loss.
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