Health insurance actuaries are getting a rare moment in the spotlight as Republicans in Congress focus on a relatively obscure provision of the health care reform law. That provision, the Affordable Care Act’s risk corridor premium stabilization program, is a highly technical program which, in short, limits health insurance plans' profits and losses. The temporary program (it is set to go away by 2017) works by comparing a plan’s anticipated claims for a given year to the plan’s actual claim experience. If the plan experiences higher than expected claims they receive money from the program and if the plan experiences lower than expected claims it pays money into the program. However, if not enough health plans pay into the risk corridor program to offset the payments to the plans receiving funds from the program, the federal government is on the hook for the difference. 

It is this potential government subsidy that Sen. Marco Rubio of Florida and Rep. Tim Griffin of Arkansas, both Republicans, have focused on in separate bills in their respective chambers (S.1726 and H.R. 3541). Only a few days ago House Budget Committee Chairman Paul Ryan, a Republican of Wisconsin, said that Republicans may push to repeal this program as part of the negotiations over raising the debt ceiling. However, as we now know, the debt ceiling bill was passed by the House with no such provision in it and word on Capitol Hill is that neither Rubio’s nor Griffin’s bill have much of a chance of making it out of committee, let alone to vote their respective chambers. 

So, what happened?

First, Republicans’ claims that the risk corridor program would result in huge unfunded government subsidies paid to health insurance companies were undercut by the recent Congressional Budget Office report that was released that claimed the program would result in an $8 billion net surplus for the federal government. While a number of critics have questioned the accuracy of this estimate, the report definitely took the wind out the initial effort to make the risk corridor a major issue in the debt ceiling talks.

Second, and more speculatively, it is believed that Republicans faced intense pressure from the health insurance plan lobbying industry to back down from the proposal, as the industry viewed the risk corridor program as an essential part of making the ACA economically viable from their perspective.  

However, while the Republicans’ attempt to chip away at the ACA is likely to fail in the current instance, it is almost certainly not the last attempt we will see at such a piecemeal approach to the repeal of the ACA.

Sykes is an attorney at Locke Lorde LLP and works in the firm’s Chicago office. He may be reached at

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