Winners and losers of Trump’s decision to halt ObamaCare payments

10 July, 2018, 06:24 | Author: Kara Nash
  • Trump administration freezes Obamacare payments, citing court decision

The Trump administration said Saturday it's been forced to freeze critical Obamacare payments due to a federal court decision in New Mexico, potentially causing more instability in the program's fragile markets.

The Wall Street Journal reported on Friday that the Centers for Medicare and Medicaid Services (CMS), the agency that oversees the program, is considering the temporary halt of payments to insurers this fall and next fall. The CMS, which noted that a federal court in MA found its formula fair, has asked the New Mexico court to reconsider its decision and said it is seeking a quick resolution to the legal issue.

"We were disappointed by the court's recent ruling".

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.

"CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets", Verma said.

The Trump administration is halting billions of dollars in payments required under the ACA, citing a district court decision in New Mexico from earlier this year. Small health plans also have far less capital than more established insurers to comfortably make large risk-adjustment payments.


"This action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices", Scott Serota, CEO of the Blue Cross Blue Shield Association, said in a statement. "And costs for taxpayers will rise as the federal government spends more on premium subsidies", the group said. "It moves us back to some extent to the status quo where people with pre-existing conditions found it very hard to get insurance".

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. Insurers say, the timing of the decision could mean higher premiums for millions of individuals and small businesses next year.

The Kaiser Foundation says the program "encourage insurers to compete based on the value and efficiency of their plans rather than by attracting healthier enrollees".

Republicans made this argument once before, claiming that the individual mandate for consumers to buy health insurance is unconstitutional.

The announcement came as insurers were awaiting an annual report that usually comes at the end of June, informing them of whether they owe money into the risk adjustment program or will be paid out for the previous year. Insurers were entering or returning to at least a dozen states for 2019 enrollment, while others were expanding their presence in the states in which they operate. Donald Trump's move to gut Obamacare guarantees it.

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