The first-of-its-kind lawsuit targets the Obama administration’s strategy for protecting health insurers from losses in the new marketplace.
In a lawsuit filed Monday, Evergreen Health Cooperative Inc. warned the program could “threaten the viability of the entire Affordable Care Act" if it is not fundamentally altered.
Evergreen Health, a nonprofit co-op, said it has been unfairly asked to pay millions of dollars — about one-quarter of its 2014 premiums revenue – under the law’s “risk adjustment” program.
Under the program, states collect money from better-performing insurers, like Evergreen, to pay companies that have racked up higher-than-expected medical costs.
But Peter Beilenson, Evergreen's CEO, argued the program uses an unfair formula that “tilts the field” in favor of larger, more-established companies over newer startups like the co-op programs.
