42 U.S.C. § 18062: Establishment of risk…

Summary

The Secretary must set up and run a risk-corridor program for calendar years 2014, 2015, and 2016. Qualified health plans sold in the individual and small-group markets must take part. The program adjusts payments based on how a plan’s allowable costs compare to its target amount, using a model like the one in Medicare Part D. If a plan’s costs are between 103% and 108% of the target, the government pays 50% of the amount above 103%. If costs exceed 108% of the target, the government pays 2.5% of the target plus 80% of the amount above 108%. If a plan’s costs are between 92% and 97% of the target, the plan pays 50% of the shortfall below 97%. If costs fall below 92%, the plan pays 2.5% of the target plus 80% of the shortfall below 92%. Allowable costs mean the plan’s benefit costs (not administrative costs), reduced by any risk-adjustment and reinsurance payments under sections 18061 and 18063. The target amount means total premiums (including subsidies) minus administrative costs.

Title 42, §18062

The Public Health and Welfare, Source: USLM XML via OLRC

(a)In general

The Secretary shall establish and administer a program of risk corridors for calendar years 2014, 2015, and 2016 under which a qualified health plan offered in the individual or small group market shall participate in a payment adjustment system based on the ratio of the allowable costs of the plan to the plan’s aggregate premiums. Such program shall be based on the program for regional participating provider organizations under part D of title XVIII of the Social Security Act [42 U.S.C. 1395w–101 et seq.].

(b)Payment methodology

(1)Payments out

The Secretary shall provide under the program established under subsection (a) that if—

(A)a participating plan’s allowable costs for any plan year are more than 103 percent but not more than 108 percent of the target amount, the Secretary shall pay to the plan an amount equal to 50 percent of the target amount in excess of 103 percent of the target amount; and

(B)a participating plan’s allowable costs for any plan year are more than 108 percent of the target amount, the Secretary shall pay to the plan an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of allowable costs in excess of 108 percent of the target amount.

(2)Payments in

The Secretary shall provide under the program established under subsection (a) that if—

(A)a participating plan’s allowable costs for any plan year are less than 97 percent but not less than 92 percent of the target amount, the plan shall pay to the Secretary an amount equal to 50 percent of the excess of 97 percent of the target amount over the allowable costs; and

(B)a participating plan’s allowable costs for any plan year are less than 92 percent of the target amount, the plan shall pay to the Secretary an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of the excess of 92 percent of the target amount over the allowable costs.

(c)Definitions

In this section: (1) Allowable costs

(2)Target amount

The target amount of a plan for any year is an amount equal to the total premiums (including any premium subsidies under any governmental program), reduced by the administrative costs of the plan.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Social Security Act, referred to in subsec. (a), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Part D of title XVIII of the Act is classified generally to part D (§ 1395w–101 et seq.) of subchapter XVIII of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables.

§18062 Establishment of Risk Corridors for Plans in Individual and Small Group Markets

Summary

Title 42, §18062

Notes & Related Subsidiaries

Editorial Notes

References in Text

Citations & Metadata