Trump administration halts billions of dollars of ACA payments

Maricruz Casares
Julio 10, 2018

The Trump administration has temporarily halted billions of dollars in payments to health insurers under the Affordable Care Act's risk adjustment program. To do that, the government collects money from health insurers with enrollees who were healthier and as a result "cost less to insure". About $10.4 billion was slated to be transferred a year ago.

New Mexico Health Connections and Minuteman Health of MA, two small nonprofit insurers, filed lawsuits in 2016, contending that the Obama administration created an inaccurate formula that unfairly rewarded large insurers.

The so-called "risk adjustment" program takes payments from insurers with healthier customers and redistributes that money to companies with sicker enrollees.

"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. "It enables the country to move away from a market where plans compete to avoid covering or charge more to people with preexisting health conditions, to one where competition is based on quality, affordable care for everyone".

Trump administrators suspended the payments over a February ruling by a federal district court in New Mexico, according to the reports. The CMS has appealed the decision, particularly because a MA court upheld such payments.

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The U.S. agency that administers Obamacare is freezing payments to insurers that cover sicker patients, saying a federal court ruling ties its hands. It's a move that could shake up insurance markets. The Maryland Insurance Administration has a hearing scheduled for July 31.

"Without a quick resolution to this matter, this action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices".

President Donald Trump's administration has used its regulatory powers to undermine the ACA on multiple fronts after the Republican-controlled Congress a year ago failed to repeal and replace the law propelled by Democratic President Barack Obama. Legacy insurers that have a wealth of patient data may have a leg up on coding. Overall, the momentum has been positive, with numerous major insurers following the broader market's upward momentum.

Insurance Commissioner Al Redmer Jr. said that as of now he doesn't expect the latest decision to interrupt the state's rate-setting process. President Donald Trump has repeatedly talked about trying to end the ACA, known colloquially as Obamacare, since announcing his campaign.

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

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