By Kat Greene
Law360, Los Angeles (July 28, 2014, 10:11 PM ET) — Members of the Obama administration “colluded” with insurance companies to create key provisions within the Affordable Care Act that would increase insurers’ profitability and net them a “bailout” of $1 billion this year, according to a Monday report by Republicans on the House Oversight and Government Reform Committee.
According to the report, issued by Rep. Darrell Issa, R-Calif., CareFirst BlueCross Blue Shield’s CEO Chet Burrell reached out to Valerie Jarrett, a senior adviser to the president, to say insurers would increase their premiums if a certain program were implemented as originally planned. Jarrett responded that her team was “aggressively pursuing” options, the report said.
The original plan for the so-called risk corridor program called for budget-neutral implementation, according to the report. But that wouldn’t serve insurance companies, which could lose profits on the deal, the committee said, so the White House instead negotiated in closed-door meetings to create a provision that would pay insurers taxpayer money if they lost a set amount from the program.
“While the President’s rhetoric during the debate leading up to ObamaCare’s passage was largely critical of insurance companies and inconsistent with his administration’s closed door relationships with health insurers, ObamaCare contained key provisions to increase insurance company profitability,” the committee wrote in its report.
Risk corridors are a provision of Obamacare that transfers money from profitable insurance companies in the program to those that suffer losses selling compliant plans on the exchanges, the committee said.
The Congressional Budget Office said in February that the risk corridors would provide a net $8 billion return to taxpayers, according to the committee. The committee sought clarity in that estimate and said it instead uncovered that almost all insurance companies expect to receive risk corridor payments to cover their losses and that the payments could reach as high as $1 billion this year, according to the report.
The report also called out Tara McGuiness, the White House communications director, and Chris Jennings, one-time health reform coordinator and deputy assistant to the president for health policy, for allegedly trading talking points with health insurance executives for TV appearances.
The report included several emails that show health care executives congratulating the White House officials for sticking to certain points on their TV spots and discussing how to best construct the official message on problems with the online exchanges. Jennings and McGuiness gave talking points to Florida Blue Cross and Blue Shield CEO Patrick Geraghty for an October appearance on “Meet the Press,” for example, according to the report.
Spokespeople for the administration and CareFirst did not immediately respond to requests for comment late Monday.
–Editing by Christine Chun.