Trump administration halts billions of dollars of ACA payments

Henrietta Strickland
July 9, 2018

The Trump administration said Saturday that it was suspending $10.4 billion in payments expected by Obamacare insurers, citing a federal judge's ruling in a lawsuit over a program's formula guidelines.

"We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments", the group said in a statement Saturday.

"We were disappointed by the court's recent ruling", Seema Verma, administrator for the Centers for Medicare and Medicaid Services (CMS), which administers the program, told The Wall Street Journal in a statement. CMS has made no public statements regarding policy changes for the risk-adjustment payments as of yet. Insurers say, the timing of the decision could mean higher premiums for millions of individuals and small businesses next year. "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". "It will undermine Americans' access to affordable coverage, particularly for those who need medical care the most".

"This action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices", Serota said in a statement.

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.

Risk adjustment is a key aspect of market stabilization under the ACA, also known as Obamacare. The government collects the money from health insurers with relatively healthy enrollees, who cost less to insure.

The suspension of the payments comes amid other efforts by the Trump administration to try to chip away at the landmark health care law.

Trump and his team have continued to argue that the individual mandate is unconstitutional and has promised to refuse to defend any parts of Obamacare in court.

The payments in question were meant to offset costs for insurers that had enrollees who were "sicker, more expensive", Reuters reported.

It could also encourage more insurers to bow out of Obamacare. The move is just the newest in a series of attempts by Trump's administration to disrupt the insurance markets that the Affordable Care Act depends on to function. Some insurances have even expanded their presence in states where they were already operating with help from the Affordable Care Act.

"This is occurring right at the time of year that people (insurers) are making decisions about whether to participate in the exchanges and what premiums to charge if they do", said Eric Hillenbrand, a managing director at consultancy AlixPartners.

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

Other reports by Click Lancashire

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