Trump administration halts billions in insurance payments under Obamacare

Maricruz Casares
Julio 9, 2018

The Trump administration says it's freezing payments under an "ObamaCare" program that protects insurers with sicker patients from financial losses, a move expected to add to premium increases next year.

In February, U.S. District Judge James Browning in Albuquerque, N.M., ruled that the formula used by CMS to calculate payments in the risk-adjustment program was flawed and had not been adequately justified by federal regulators. Through the program, roughly 20 million Americans have received health care coverage.

"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", Verma said.

The trade group America's Health Insurance Plans said in an emailed statement that "We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments". "This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own". 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.

"We urge the Trump administration to back off of this risky and destabilizing plan, and instead begin working on bipartisan solutions to make coverage more affordable", said Brad Woodhouse, the executive director of Protect Our Care, a progressive group that supports Obamacare.

Risk adjustment is a key aspect of market stabilization under the ACA, also known as Obamacare.

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The Kaiser Foundation says the program "encourage insurers to compete based on the value and efficiency of their plans rather than by attracting healthier enrollees".

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.

Risk-adjustment made up one of the "three R's" that constitute Obamacare's program to stabilize healthcare markets, as the program causes insurers with healthier customers to reimburse insurers with more expensive and sicker enrollees. Some insurances have even expanded their presence in states where they were already operating with help from the Affordable Care Act.

FILE PHOTO: A man fills out an information card during an Affordable Care Act outreach event hosted by Planned Parenthood for the Latino community in Los Angeles, California September 28, 2013.

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

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