Trump freezes Obamacare payment program, leaving insurers scrambling
The sabotage of Obamacare continues.
The Trump administration is freezing a critical Affordable Care Act (ACA) insurance payment program that discourages insurers from cherry picking healthier enrollees by compensating them for sicker ones.
The move could rattle insurance companies at the very moment when they’re deciding whether to continue selling ACA plans and setting premiums for 2019. It’s not immediately clear what this means for ACA enrollees, if anything.
The news comes after the Wall Street Journal reported they might suspend the program:
The suspension of some payouts under the program, known as risk adjustment, could come in the wake of a recent decision by a federal judge in New Mexico, who ruled that part of its implementation was flawed and hadn’t been adequately justified by federal regulators, people familiar with the plans said.
“We were disappointed by the court’s recent ruling. As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold,” said the Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma in a statement released on Saturday. “CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets.”
CMS argues the ruling prevents it from making further collections or payments in the risk adjustment program, including amounts for the 2017 benefit year which amount to $10.4 billion, until the litigation is resolved. However, outside experts are skeptical of the claim.
To make it easier for people with pre-existing conditions to buy coverage and ensure market stability in the process, the risk adjustment program moves money from insurers who cover healthier populations than the statewide average to insurers who cover sicker populations.
The government uses a complicated formula to determine which insurers pay in and this formula was the point of contention, prompting two nonprofit insurers to file two different lawsuits.