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Trump administration takes another swipe at 'ObamaCare'

09 July 2018

Billions of dollars in payments to health insurers under the Obamacare health care law were stopped Saturday by the Trump administration.

The Centers for Medicare and Medicaid Services (CMS), the agency that oversees the program, cited a recent federal court decision that found the formula for calculating the risk adjustment payments to be flawed. All in all, the program was slated to shift $10.4 billion among insurers in 2017, according to the agency.

"Any action to stop disbursements under the risk adjustment program will significantly increase 2019 premiums for millions of individuals and small-business owners, and could result in far fewer health plan choices", said Justine G. Handelman, a senior vice president of the Blue Cross and Blue Shield Association.

It has also scaled back the advertising budget for Obamacare healthcare plans during the open-enrollment period by about 90 percent.

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America's Health Insurance Plans (AHIP), a trade group representing insurers offering plans via employers, through government programs and in the individual marketplace, said the CMS suspension would create a "new market disruption" at a "critical time" when insurers are setting premiums for next year. The ruling from New Mexico US District Court Judge Thomas Browning, says the federal government has been using an "arbitrary and capricious" method to determine payments.

A February ruling from a federal court in New Mexico invalidated the risk adjustment formula, and a January ruling from a federal court in MA upheld it. It's a move that could shake up insurance markets. "It will undermine Americans' access to affordable coverage, particularly those who need medical care the most".

The Trump administration has halted billions of dollars of Obamacare payments to insurers due to a court ruling.

The payments are meant to help stabilize health insurance markets by compensating insurers that had sicker, more expensive enrollees in 2017.

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The pro-ACA group Protect Our Care issued a statement from its executive director, Brad Woodhouse, Saturday after the administration announced its decision regarding risk penalty payments, characterizing the move as further chipping away at the Affordable Care Act.

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.

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

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Trump administration takes another swipe at 'ObamaCare'