Trump administration halts billions in Obamacare payments to health insurers

Pearl Mccarthy
July 12, 2018

Maryland's health insurance companies are concerned that a Trump administration decision to suspend payments that help to cover the costs of the sickest patients will further destabilize the market and could push them to seek even higher premiums on plans consumers already say are too expensive.

On Feb. 28, 2018, a federal judge in New Mexico decided that the use of the statewide average premium formula to calculate risk adjustment payments was flawed.

She noted it is the latest action by the administration of President Donald J. Trump, which has weakened the landmark law that expanded healthcare for many more Americans. About 20 million Americans have received health insurance coverage through the program known as Obamacare. To do that, the government collects money from health insurers with enrollees who were healthier and as a result "cost less to insure".

Rumors that the Trump administration would freeze payments were circulating late last week. But the U.S. Supreme Court upheld the law, finding that the fine consumers faced for not buying insurance was actually a tax.

The CMS statement said the agency has asked the New Mexico court to reconsider its decision and expressed hope for a prompt resolution of the issue. "In light of this analysis, the Government can not lawfully make the cost-sharing reduction payments", the White House said after ending the payments in October 2017. "It will allow more companies to get into the insurance market".

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America's Health Insurance Plans (AHIP), a trade group representing insurers offering plans via employers, through government programs and in the individual marketplace, said the CMS suspension would create a "new market disruption" at a "critical time" when insurers are setting premiums for next year.

In a separate statement, the CMS said it was "disappointed" by the court's ruling, adding that "billions of dollars in risk adjustment payments and collections are now on hold".

Risk adjustment "has been long supported and embraced by both Republicans and Democrats", said Scott Serota, president of the Blue Cross Blue Shield Association.

CMS said that the amount frozen for the 2017 benefit year is $10.4 billion, which is drawn from insurers to go to other insurers. With premium increases on the horizon, they expected what has been a volatile market to stabilize.

These "association health plans" are just one more facet of Trump's Obamacare sabotage, cheap plans with limited coverage meant to draw healthy people out of the Obamacare markets. 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. "This is one of several steps the Trump administration has taken to undermine the ACA".

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