Trump administration freezes payment program of 'Obamacare' - Newswatch

Trump administration takes another swipe at 'Obamacare'

Trump continues to attack Obamacare even as almost a dozen insurers have started to warm to the program with at least a dozen states seeing an increase in the number of insurers participating in the healthcare exchange.

The Trump administration is planning to suspend some payments to insurance companies, a key provision of the Affordable Care Act, this fall in the wake of a federal judge's decision, according to The Wall Street Journal.

The idea is to remove the financial incentive for insurers to "cherry-pick" healthier customers.

The Affordable Care Act's (ACA) "risk adjustment" program is meant to incentivize health insurers to cover individuals with pre-existing and chronic conditions by collecting money from insurers with relatively healthy enrollees to offset the costs of other insurers with sicker ones.

CMS was referring to a February ruling from a federal court in New Mexico that invalidated the risk adjustment formula, and a January ruling from a federal court in MA that upheld it. "It will create more market uncertainty and increase premiums for many health plans - putting a heavier burden on small businesses and consumers, and reducing coverage options", AHIP said.

The Congressionally mandated risk adjustment program of the Affordable Care Act redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees, helping to ensure that sicker individuals can receive coverage by sharing the cost of covering them.

"Insurers hate uncertainty, and when faced with it tend to raise premiums to hedge their bets", says Larry Levitt, Senior Vice President at the Kaiser Family Foundation.

Other insurers say the administration's action interferes with a program that's working well. "This is one of several steps the Trump administration has taken to undermine the ACA".

CMS provided a timeline, noting that after the February 28 decision by the New Mexico federal court, it filed a motion for reconsideration, and on June 21 the court held a hearing on it. CMS is waiting for the court's ruling, it said.

White House chipping away at the Affordable Care Act; correspondent Peter Doocy looks at the changes being made to the system. Last month the Department of Justice decided not to defend the law in a court challenge in Texas, jeopardizing the part of the law that protects people with pre-existing conditions from being denied coverage, as NPR reported.

The CMS statement said the agency will "provide additional guidance shortly on how it will handle other issues relating to risk adjustment payments".

"The Trump administration just keeps pushing their destructive repeal-and-sabotage agenda, no matter the cost to the American people", the statement reads. New Mexico's ruling alone isn't enough to freeze payments, unless, he says, it's a "politically motivated" move to further disrupt the ACA.

"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.

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