Trump administration halts billions in insurance payments under Obamacare

09 July, 2018, 09:08 | Author: Kara Nash
  • Obamacare David Axelrod cried passed nr_00000000

WASHINGTON-The Trump administration's move to suspend billions of dollars in payments that insurers expect injects new uncertainty into the Affordable Care Act's insurance markets right as the companies are deciding next year's rates.

CMS, which is overseen by the U.S. Department of Health and Human Services, said the move was necessary because of a February ruling by a federal court in New Mexico, which found that the federal government was using an inaccurate formula for allocating the payments.

The New York Times suggested the payment freeze could "increase uncertainty in the markets and drive up premiums this fall".

"We were disappointed by the court's recent ruling," CMS Administrator Seema Verma said in a statement. "This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own".

"Without a quick resolution to this matter, this action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices. And costs for taxpayers will rise as the federal government spends more on premium subsidies", the group said. "It will undermine Americans' access to affordable coverage, particularly those who need medical care the most".

Levitt says the administration's announcement was "a little perplexing", given that the legal fight over the conflicting rulings in New Mexico and MA is still ongoing.

The risk adjustment program plays an important role in the ACA by pooling risk for insurers, transferring funds from insurers who enroll healthier members for relatively less, to those that take on higher costs in order to enroll sicker members.


"I think insurers are going to be watching very closely what the administration says in court, and whether this is a sign of further steps to undermine the law, or a good faith effort to try to comply with the judge's order", he says. In June, the administration said it wouldn't defend central portions of Obamacare in federal court, claiming that key provisions should be invalidated and that the individual mandate is unconstitutional.

Risk-adjustment made up one of the "three R's" that constitute Obamacare's program to stabilize healthcare markets, as the program causes insurers with healthier customers to reimburse insurers with more expensive and sicker enrollees.

It also comes as insurers appeared to be warming back up to the ACA.

FILE PHOTO: A man fills out an information card during an Affordable Care Act outreach event hosted by Planned Parenthood for the Latino community in Los Angeles, California September 28, 2013.

The Trump administration has halted billions of dollars of Obamacare payments to insurers due to a court ruling. Some insurances have even expanded their presence in states where they were already operating with help from the Affordable Care Act.

These moves are prompting some insurers to request premium hikes for 2019 in the double digits.

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