To reduce the risk to the insurance companies, a reserve fund called a risk corridor was established to compensate them for losses on their policies during Obamacare's first three years of operations. It was funded by a tax on any profits realized by other insurance companies on their Obamacare policies.
Only problem very few insurance companies paid into the reserve fund due to lack of profits!
Yup .... to expound on the subject (people who write/explain better than I do):
Good article:
UnitedHealth Group Losing Big Money and Threatening to Leave the Obamacare Exchanges—Because the Obamacare Insurance Business Model Does Not Work
http://healthpolicyandmarket.blogspot.com/2015/11/unitedhealth-group-losing-big-money-and.html
Excerpt: That the Affordable Care Act’s individual market risk pool is so far unacceptable was reinforced by a recent McKinsey report that health insurers lost an aggregate $2.5 billion in the individual health insurance market in 2014—an average of $163 per enrollee. They reported that only 36% of health plans in the individual market made money in 2014—and that was before they found out that the federal government was only going to pay off on 12.6% of the risk corridor reinsurance payments the carriers expected and many had already booked.
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Did Rubio deal a mortal blow to ObamaCare?
http://hotair.com/archives/2015/11/25/did-rubio-deal-a-mortal-blow-to-obamacare/
Excerpt: Two years ago, Marco Rubio won a fight during the budget battles to include a requirement for HHS to maintain budget neutrality in its risk-corridor programs. Rubio had pushed back against this program for months, claiming — as it happens, accurately — that it was a back-door bailout of the insurance companies that had cooperated in the effort to pass ObamaCare. Instead of allowing HHS to dip into general funds for risk-corridor payments, Rubio’s rider restricted those payouts to funds collected from taxes on insurers.
The move forced HHS to cut expected risk corridor payments to pennies on the dollar, and prompted the closure of more than half of the co-ops launched by HHS to provide supposedly low-cost coverage. Now that United Healthcare has signaled that it may cut its losses and get out of the ObamaCaure market, The Hill credits Rubio with starting the death spiral many predicted when Democrats first passed ObamaCare in March 2010