Trump Administration To Stop Paying Some Obamacare Bills

Henrietta Strickland
July 10, 2018

The Trump administration's abrupt suspension of billions of dollars in payments to ObamaCare insurers has prompted new warnings of rising premiums as health companies scramble to adjust. Citing conflicting federal court decisions on the program, the CMS said it can not collect or disburse funds under the risk-adjustment program. The CMS, which noted that a federal court in MA found its formula fair, has asked the New Mexico court to reconsider its decision and said it is seeking a quick resolution to the legal issue.

"We were disappointed by the court's recent ruling", said CMS Administrator Seema Verma. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold". Initially, the decision could affect $10.4 billion in payments tied to the 2017 benefit year, . Small health plans also have far less capital than more established insurers to comfortably make large risk-adjustment payments. While the administration says it is required to stop payments because of the court decision, insurers say the move could result in higher premiums for millions of individuals and small businesses. "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".

Insurance is normally based on risk, with premiums costing more for clients who are expected to require more healthcare services.

David Anderson, a health policy researcher at Duke University, said the administration's latest move could lead to "more hassle, more aggravation, more frustration for insurers trying to make this market work".

The mainstream media report offered more criticism from supporters of the Affordable Care Act.

Dr. Dave Weldon, president of the Alliance of Health Care Sharing Ministries, discusses why the health care sharing ministry group, known as Samaritan Ministries, could be a good alternative for people who can't find affordable healthcare.

The Risk adjustment formula is a key component of Obamacare, allowing for market stabilization. The program transfers funding from plans with lower-risk enrollees to higher-risk ones in an effort to even out the market and "encourage insurers to compete based on the value and efficiency of their plans rather than by attracting healthier enrollees", according to the Kaiser Family Foundation.

Republicans made this argument once before, claiming that the individual mandate for consumers to buy health insurance is unconstitutional. Insurers were entering or returning to at least a dozen states for 2019 enrollment, while others were expanding their presence in the states in which they operate.

President Donald Trump's administration has used its regulatory powers to undermine the ACA on multiple fronts after the Republican-controlled Congress past year failed to repeal and replace the law propelled by Democratic President Barack Obama.

Other reports by Click Lancashire

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