Maine and Alaska Insurance Companies Seek $12Bn to US Fed Government

Maine and Alaska insurance companies, Maine Community Health Options, and Moda Health Plan raised complaints to the Supreme Court over the participation in the Affordable Care Act (ACA).

The two insurance companies are among the others who lost a lot of money by participating in the ACA program of the US government. According to the companies, Congress promised to pay the money for three years but later deny funds citing appropriations riders.

Initially, the government also pledged that the Department of Health and Human Services would cover for the financial losses but the money didn’t come.

“The net effect was a bait-and-switch of staggering dimensions in which the government has paid insurers $12 billion less than what was promised,” said Moda Health Plan in a statement.

Maine and Alaska Insurance Companies

Aside from the two insurers, there are also others who raised the same concern over the ‘bait-and-switch’ scheme. Blue Cross and Blue Shield of North Carolina brought the complaint to the Supreme Court for a decision.

Last June, the Supreme Court accepted and consolidated the three cases brought to the high court saying insurers were able to uphold their end of the bargain. However, a Congressional decision nixed the payment agreement and forced Moda to stop selling insurance altogether to Alaskans.

Obamacare Glitch

Corridors program under the Affordable Care Act helps stabilize the risks associated with predicting premiums wrong. If the premium turns out too high, the private insurance company pays some of the excesses back to the government. Similarly, if the premium is too low, the government reimburses the insurance company for part of the losses.

What happened with the case of Moda Health Plan is, the government refuses to acknowledge the remaining $12 billion amount, which is part of the insurance company losses.