GAO: Treasury Department Shortchanged in Favor of Insurers Under Transitional Insurance Program

The Obama administration failed to adequately compensate the Treasury Department, instead favoring insurers under a program called “transitional insurance,” the Wall Street Journal reports. The 2010 health law required federal health officials to collect fees from unions, employers and insurance companies to reimburse health plans that sustained a heavier burden of medical claims during the first few years of the law’s life because they treat patients with catastrophic medical problems.

Citing a study by the Government Accountability Office (GAO), the newspaper reports: “The health law required HHS to collect $10 billion for 2014, $6 billion for 2015, and $4 billion for 2016 for insurance companies. The law also said HHS would collect $2 billion for 2014, $2 billion for 2015, and $1 billion for 2016 for the Treasury….” But the “rate they devised led to shortfalls, and when that happened the required payments to Treasury weren’t made.”

Source: Wall Street Journal