Blue Cross NC says feds owe $130M backup for ACA policies

RALEIGH, N.C. (AP) — North Carolina’s largest health insurer is suing to recover $130 million it says Washington promised but didn’t pay after it took on sicker and older customers under President Barack Obama’s reform law.

Blue Cross and Blue Shield of North Carolina sued the federal government Thursday, saying it is being shorted on promised payments designed to help stabilize health insurance premiums in 2014. The company estimates that the government also will owe it more than $175 million in the so-called risk corridor payments for 2015.

That suggests the government underpayments represent about three-quarter of the company’s loss of more than $400 million on insurance policies sold on marketplaces created by the federal Affordable Care Act during 2014 and 2015.

Blue Cross has said its roughly 330,000 ACA customers use the emergency room more frequently, have more orthopedic procedures and take more expensive drugs that the rest of its nearly 4 million customers.

“We are working hard to make the Affordable Care Act work for our customers and our company,” Blue Cross CEO Brad Wilson said in a statement. “The federal government’s failure to honor its legal obligations contributed significantly to our ACA losses in 2014 and 2015 and makes it more challenging for our company to continue selling ACA products to our customers.”

Congressional Republicans opposed to the health reform law restricted the administration’s legal authority to make payments to insurers under the program. As a result, the government could pay only $362 million of $2.87 billion in risk corridor claims from insurers for 2014.

At least two other insurance companies have previously filed similar lawsuits claiming the government had no right to reduce payments it promised would diminish insurance companies’ risks for taking on ACA patients. They are Health Republic Insurance Company of Oregon and Pittsburgh-based Blue Cross plan Highmark Inc.

A spokeswoman for the federal Centers for Medicare and Medicaid Services, Lauren Shaham, declined comment on Thursday’s lawsuit, which was filed in the U.S. Court of Federal Claims in Washington.

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