Trump administration freezes risk adjustment payments

Trump administration freezes Obamacare payments, citing court decision

Trump administration freezes Obamacare payments, citing court decision

Health insurers warned that a move by the Trump administration on Saturday to temporarily suspend a program that was set to pay out $10.4 billion to insurers for covering high-risk individuals previous year could drive up premium costs and create marketplace uncertainty.

The Centers for Medicare and Medicaid Services said it had to put the payments on hold, after a US district court judge ruled the government arrived at the formula that guides the payouts in a flawed way.

The program is critical to markets under the Affordable Care Act because insurers with healthier consumers enrolled in plans reimburse insurers with sicker and more expensive enrollees. The program transfers funding from plans with lower-risk enrollees to higher-risk ones in an effort to even out the market and "encourage insurers to compete based on the value and efficiency of their plans rather than by attracting healthier enrollees", according to the Kaiser Family Foundation. The move brought a sharp response from health insurers warning of market disruptions and higher costs.

While some may say this means no government money is involved, this ignores the concern expressed in the New Mexico court decision.

"We were disappointed by the court's recent ruling", said CMS Administrator Seema Verma. The Trump administration claims it is obligated to suspend these payments because of a court ruling out of New Mexico questioning their legality, but there is reason to be skeptical.

"People spin the administration's decision as Trump trying to do harm, but it's exactly the opposite", he added. Health law experts are... It's a move that could shake up insurance markets.


"The decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own", the group said. New Mexico's ruling alone isn't enough to freeze payments, unless, he says, it's a "politically motivated" move to further disrupt the ACA.

"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.

In the MA case, however, a federal judge upheld the Obamacare formula, the Journal reports.

The Trump administration has halted billions of dollars of Obamacare payments to insurers due to a court ruling. "And costs for taxpayers will rise as the federal government spends more on premium subsidies".

CMS was referring to a February ruling from a federal court in New Mexico that invalidated the risk adjustment formula, and a January ruling from a federal court in MA that upheld it. The CMS has asked Judge Browning to reconsider his ruling and is awaiting a decision.

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