NCPA Senior Fellow John R. Graham Testifying on Capitol Hill June 18th

Graham: ACA Risk Corridors Could Mean Taxpayer Losses

Source: NCPA

DALLAS, TX (June 16, 2014) - Congress should use whatever tools it has to limit taxpayer liability in the Affordable Care Act's risk corridors, according to National Center for Policy Analysis Senior Fellow John R. Graham.

Graham will testify on Wed., June 18 before the House Committee on Oversight and Government Reform's Subcommittee on Economic Growth, Job Creation and Regulatory Affairs in Washington, D.C. The hearing will focus on the insurance company "bailout" provisions of the Affordable Care Act, which could leave taxpayers on the hook for insurance company losses.

"Obamacare included three mechanisms to backstop insurers' risk: Risk adjustment, reinsurance, and risk corridors," says Graham. "The last two, reinsurance and risk corridors, are politically motivated tools that are critical to insurers' ability to survive the exchanges through the end of 2016."

Graham will discuss how Obamacare's risk corridors leave taxpayers with unlimited obligations to compensate exchange insurers if medical costs exceed insurers' target costs. Unfortunately for taxpayers, exchange expenses are likely to be high:

  • Insurance companies on the exchanges need to ensure Americans between the ages of 18 and 34 in order to be profitable. But while 40 percent of so-called "young invincibles" were expected to join exchange plans, only 28 percent of enrollees fall within the age range.

  • Medication expenses in the exchanges have been much higher than in commercial health plans.

For an interview with John R. Graham, please contact Caytie Daniell or Brian Williams.


NCPA Senior Fellow John R. Graham


Hearing - "Poised to Profit: How ObamaCare Helps Insurance Companies Even if it Fails Patients" Subcommittee on Economic Growth, Job Creation and Regulatory Affairs
Committee on Oversight and Government Reform
United States House of Representatives


10:00 a.m., Wednesday, June 18, 2014


Rayburn House Office Building, Room 2154

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