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Health Republic sues feds for $5B

The state insurer filed a class action lawsuit to reclaim Obamacare funds.

‘Health Republic’s personal experience demonstrates the cascading, fatal effects the Spending Bill Provisions have had, even on companies that did everything right,’ the company wrote in the suit.

Health Republic is seeking to make the suit a class action to permit other insurers to recover what they are owed from the program — as much as $5 billion, said Health Republic CEO Dawn Bonder.

(READ MORE: Portland Business Journal)

Health Republic lost $20 million because “the U.S. Centers for Medicare and Medicaid revealed on Oct. 1. that it would pay only 12.6 cents on the dollar owed insurers under the ‘risk corridor’ program,” according to the Portland Business Journal.

Moda Health only received $11 million of the $181 owed federal funds two years into the program, according to the Portland Business Journal.

The Portland Tribune reports “Health Republic was one of 23 federally backed startups set up to increase competition in selected markets.”

Dawn Bonder, president and CEO of Health Republic, said in a prepared statement that her company gambled on the new Affordable Care Act market while assuming the federal government would follow through on its obligations.

'Health Republic did exactly what we were asked to do under the ACA: we designed and priced our plans for the market we hoped would materialize, not for the market we feared would materialize. Like every health insurer in the post-ACA market, we knew the costs of this new population could be astronomical, but we couldn’t be sure until we learned who purchased our plans and analyzed their medical costs under the new ACA plans. Without the risk-sharing provisions in the ACA, especially risk corridor, we, along with every other health insurer across the nation, would have been forced to think long and hard about how to proceed in these new uncharted waters created by the ACA. It is unconscionable for the government to default on their obligation to pay the risk corridor amounts owed in a timely manner.'

(READ MORE: Portland Tribune)

Last modified onThursday, 25 February 2016 09:50

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