12/7/16 – updated January 2025
We do not diagnose disease or recommend a dietary supplement for the treatment of disease. You should share this information with your physician who can determine what nutrition, disease and injury treatment regimen is best for you. You can search this site or the web for topics of interest that I may have written (use Dr Simone and topic).
“We provide truthful information without emotion or influence from the medical establishment, pharmaceutical industry, national organizations, special interest groups or government agencies.” Charles B Simone, M.MS., M.D.
US TAXPAYERS MAY OWE BILLIONS TO HEALTH INSURERS
Lawrenceville, NJ (Dr Simone) – To coax insurers into Obamacare, Congress had to create a “risk-corridor” program that covered any losses incurred. Notice how jargon, “risk-corridor” program, is used to disguise the issue? Not a bad deal for the insurers – think of that business you would have started if you would have gotten paid by the government for any losses. Well, the Affordable Care Act did not appropriate any money to make risk-corridor payments. In 2015, the Department of Health and Human Services said that the insurers were owed $2.87 billion. Minimal payments were made and by the middle of 2016, only 7 of the 23 co-op insurance companies were still in business. More imploded. The Congress made Obamacare ‘budget neutral’, and insurer’s entitlement to full risk-corridor payments ends when funding for the program is exhausted. And since there is no money appropriated for court judgments, the United States can’t make a payment even if a court orders it to do so. However, there is a discretionary fund, the Judgment Fund, that the President of the United States can use to settle lawsuits against the United States. Congress could amend the Judgement Fund to prohibit payment.
Medicare Advantage Overpayments: There have been significant discussions around how private insurers participating in Medicare Advantage could be overbilling the government. An investigation by The Wall Street Journal highlighted how major insurers like UnitedHealth Group have managed to extract billions more than expected from the Medicare Advantage program due to inflated risk scores, which are meant to adjust payments based on the health of the enrolled population. This practice suggests that instead of taxpayers owing money to insurers, there might be an ongoing issue where taxpayers are actually overpaying due to these billing practices.
ACA Risk Corridor and Cost-Sharing Reduction Payments: Another aspect involves payments under the Affordable Care Act (ACA). There have been legal battles over risk corridor payments, which were intended to stabilize the insurance market by offsetting losses for insurers. A Supreme Court ruling in 2020 mandated that the federal government pay insurers around $12 billion for these losses from the early years of the ACA implementation. Similarly, in 2019, health insurers were awarded $1.6 billion for unpaid cost-sharing reduction subsidies, which were supposed to lower costs for low-income enrollees but were not funded by Congress.
Tax Subsidies and Premium Taxes: Taxpayers indirectly fund the health insurance system through tax subsidies and exemptions, like those for employer-sponsored health plans, which significantly reduce the cost of health insurance for employees but increase government spending or tax expenditure. Additionally, state governments have been known to levy taxes on health insurance premiums, which indirectly increases federal spending because these premiums are often subsidized by federal tax credits or directly by federal programs like Medicaid managed care.
Current Public Sentiment: On platforms like X, there’s considerable frustration voiced by public figures and users about how these financial arrangements might be misusing taxpayer money. For instance, posts have highlighted the need for oversight on Medicare Advantage overpayments, suggesting a public concern over how these funds are managed.
Conclusion: The notion that U.S. taxpayers might owe billions to health insurers needs to be contextualized. While there have been instances where insurers have won legal battles to recover funds from the government, there’s also a significant argument that taxpayers are already overpaying due to inefficiencies, overbilling, and the complex interplay of insurance and government health programs. The actual financial flow might be more about correcting these imbalances than owing new payments. However, this situation underscores the need for clearer policy on how health insurance is funded and regulated to ensure taxpayer money is used effectively.
Let’s see if the little guy has to pay for this bailout.
(c) 2017- 2025 Charles B. Simone, M.MS., M.D.
