The Trump administration said Saturday that it is temporarily halting billions of dollars of payments created to help insurers meet the Affordable Care Act requirement that they provide coverage regardless of whether a person is healthy or sick.
The Center for Medicare and Medicaid Services (CMS) has suspended payments to health insurers with a large number of sick Obamacare clients. Payments for 2017 are $10.4 billion. The risk-adjustment program has been a source of frustration for small insurers and ACA co-ops that claim the formula makes their membership bases look healthier than they are.
The Blue Cross Blue Shield Association, whose members are a mainstay of Affordable Care Act coverage said it was "extremely disappointed" with the administration's action.
"As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", CMS Administrator Seema Verma said in the agency's statement.More news: Netflix Debuts "Smart Download" Feature As Boost For Binges
America's Health Insurance Plans (AHIP), the trade organization representing health insurers, decried the suspension of the payments.
In January this year, the federal district judge in MA upheld the methodology used by the federal government to calculate risk adjustment payments.
Similarly, past year the Trump administration ended Obamacare's cost-sharing reduction payments to health insurers.
"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".More news: OnePlus 6 256GB Midnight Black now available in India
In February, however, the federal district judge in New Mexico issued a decision voiding the formula used in calculating risk adjustment payments for the 2014-2018 benefit years.
An insurance industry source said one fix the industry is pushing for is providing that additional explanation to the court, through what is known as an interim final rule, in order to resume payments.
"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. These include eliminating the individual mandate penalty and broadening the availability of two alternatives to Affordable Care Act policies.
"People spin the administration's decision as Trump trying to do harm, but it's exactly the opposite", he added. The insurers have requested average rate increases for 2019 that range from 18.5 percent to 91.4 percent, depending on the type of plan. Eventually, experts say, some insurers could simply get fed up and exit ObamaCare markets, leading to fewer choices for consumers.More news: Trump Still Distorting NATO Spending
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