July 01, 2018

Federal Circuit Rules in the PPACA Risk Corridor Cases

David Ermer, Ermer Law Group, PLLC, Washington, DC

The Patient Protection and Affordable Care Act (PPACA) created three programs – risk adjustment, reinsurance, and risk corridors1 – that were intended to stabilize its new health insurance marketplaces. The risk corridor program was designed to subsidize unprofitable qualified health plans (QHPs) in the marketplaces with money contributed by profitable QHPs in the first three years of the marketplaces’ existence -- 2014, 2015, and 2016.2 Unfortunately, financial losses in the PPACA marketplaces vastly overshadowed financial gains in those years.

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