The "risk corridors program" was created under the U.S. Affordable Care Act (ACA), or "Obamacare." To incentivize health insurers to participate in state health exchanges where potentially higher-risk individuals could buy standardized health insurance regardless of preexisting conditions, the ACA risk corridors program provided assurance that the U.S. government would repay insurers if their expenses exceeded a threshold; conversely, if an insurer's revenues exceeded that threshold, the insurer would pay a portion to the government.

However, the ACA did not provide funds for risk corridor payments to insurers and later appropriations legislation prohibited the use of funds for this purpose. This effectively capped payments to insurers at the amount of payments received by the government from insurers, long after insurers had begun setting up and operating health exchanges in reliance on the risk corridors program. For use year 2014, the government collected just $362 million from insurers with surpluses but owed $2.8 billion to insurers with expenses over the threshold; by 2016 the cumulative shortfall amounted to $12.6 billion.