Language inserted by Sen. Marco Rubio into a major spending bill last year has significantly undermined a key aspect of the Affordable Care Act, setting the stage for this year's collapse of more than half of the nonprofit insurance co-ops established under the health law, writes The New York Times.
Little noticed at the time, the provision strictly limited so-called risk corridor payments intended to cushion the co-ops from the risk of enrolling too many sick patients to be covered by revenue from premiums in the first three years of Obamacare. Mr. Rubio, a Republican presidential candidate, termed the payments a "taxpayer-funded bailout" for insurers.
The 23 state-level, consumer-owned providers were created to compete with traditional insurers and hold down premiums. Twelve have folded, mostly after the government said in September it would make $362 million in risk corridor payments, an eighth of what the co-ops expected. Officials at many of the nonprofit insurers, which were already experiencing significant losses, blamed their groups' collpase on the low payments.