Trump Suspends Obamacare Payments To Insurers

Trump Suspends Obamacare Payments To Insurers

In a separate statement, the CMS said it was "disappointed" by the court's ruling, adding that "billions of dollars in risk adjustment payments and collections are now on hold". Insurers say, the timing of the decision could mean higher premiums for millions of individuals and small businesses next year.

Health insurers warned that a move by the Trump administration on Saturday to temporarily suspend a program that was set to pay out $10.4 billion to insurers for covering high-risk individuals past year could drive up premium costs and create marketplace uncertainty.

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. "It will allow more companies to get into the insurance market".

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.

In January this year, the federal district judge in MA upheld the methodology used by the federal government to calculate risk adjustment payments.

Under the risk adjustment program, insurers with healthier patients pay those with sicker patients.

Insurance companies responded quickly on Saturday with their disapproval.

At stake is more than $10 billion in "risk adjustment" payments - a feature of the 2010 health law that requires insurers with healthier consumers to reimburse plans that end up with costlier, sicker patients, so the market balances out. "It will undermine Americans' access to affordable care, particularly for those who need medical care the most".

In what now seems a rather prophetic statement, a senior vice president of the Kaiser Family Foundation cited the government involvement as the major factor in keeping the market from stabilizing.

This risk adjustment program was created to "stabilize" the insurance markets by making sure that there were several companies in each market vying for customers, thus theoretically keeping premiums reasonable. "In light of this analysis, the Government can not lawfully make the cost-sharing reduction payments", the White House said after ending the payments in October 2017.

Some health care experts, however, believe that risk adjustment has caused more damage than good and needs urgent fixing. 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.

But to Rodney Whitlock, Vice President of Health Policy at ML Strategies and former Republican congressional aide, it's not perplexing at all.

Still, insurers are grappling with changes that the Trump administration and Congress have made to Obamacare for 2019. They assisted 42% of enrollees, the agency said. The administration has to have a legal justification for their actions. "Following through with this latest act of sabotage could raise rates for all consumers even more".

The administration's funding for such outreach had already been slashed a year ago to well below the $63 million budgeted annually under former President Obama.

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