Trump administration halts billions in Obamacare payments to health insurers

Maricruz Casares
Julio 11, 2018

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.

Risk adjustment is an important part of the ACA. "It will allow more companies to get into the insurance market".

For the past five years, when insurance has been available through ACA marketplaces for people who do not have access to affordable health benefits through a job, federal health officials have started every spring working with navigator groups on plans for the coming enrollment season. In January a federal court in MA ruled the formula wasn't arbitrary and capricious.

"We were disappointed by the court's recent ruling".

The announcement was made by Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, and was precipitated by a New Mexico court ruling that suggested the calculations for the risk-adjusted premiums were flawed even despite a MA ruling that validated them.

A federal court in MA upheld the same allocation formula in January.

"Insurers hate uncertainty, and when faced with it tend to raise premiums to hedge their bets", says Larry Levitt, Senior Vice President at the Kaiser Family Foundation.

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CMS cites the late February court ruling in deciding to place a freeze on the $10.4 billion which it collected previous year, and which ordinarily would be dispersed among high-risk insurers.

While imperfect, the risk adjustment program "has helped promote market stability over the past five years", Wehrle said.

"When the rules of the game change after the fact - insurers don't necessarily see the federal government as a particularly reliable partner right now", Levitt says. They assisted 42% of enrollees, the agency said. Earlier this year, the Trump administration proposed to expand short-term junk plans, which are not required to cover people with pre-existing conditions. The administration has to have a legal justification for their actions.

The pro-ACA group Protect Our Care issued a statement from its executive director, Brad Woodhouse, Saturday after the administration announced its decision regarding risk penalty payments, characterizing the move as further chipping away at the Affordable Care Act.

"The Trump administration just keeps pushing their destructive repeal-and-sabotage agenda, no matter the cost to the American people", the statement reads. However, under Obamacare, insurance companies can not charge higher premiums, or even deny coverage, to clients with pre-existing conditions. But a month later a federal judge in New Mexico said it was.

The Trump administration broadened the opportunity for private sector agents and brokers to assist consumers in signing up last fall.

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