Trump administration halts billions in insurance payments under Obamacare

The Trump administration is taking another swipe at Obamacare by suspending payments to insurance companies

The Trump administration is taking another swipe at Obamacare by suspending payments to insurance companies

The Trump administration has taken an axe to the Affordable Care Act, suspending a program that was set to pay $10.4 billion to insurers for covering high-risk individuals a year ago.

In a weekend announcement, the Centers for Medicare and Medicaid Services said the administration is acting because of conflicting court ruling in lawsuits filed by some smaller insurers who question whether they are being fairly treated under the program.

The calculated risk adjustment payment for 2017 was $10.4 billion, according to CMS.

Under the risk adjustment program, insurers with healthier patients pay those with sicker patients.

The mainstream media report offered more criticism from supporters of the Affordable Care Act.

"As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", CMS Administrator Seema Verma said in the agency's statement.

In the meantime, some health insurers are potentially out billions of dollars. But another district court in MA upheld the formula.


President Donald Trump's administration has used its regulatory powers to undermine the ACA on multiple fronts after the Republican-controlled Congress previous year failed to repeal and replace the law propelled by Democratic President Barack Obama.

Insurance is normally based on risk, with premiums costing more for clients who are expected to require more healthcare services.

The Blue Cross Blue Shield Association, a federation of 36 Blue Cross and Blue Shield companies nationwide, also expressed disapproval at the move, saying it could create "turmoil" in the market.

"So much uncertainty put in the market at this point of time is very unnerving", said Ritu Agarwal, senior associate dean of research at the University of Maryland Robert H. Smith School of Business, who follows the health care system.

The decision comes after a March 2018 court ruling that found the formula for calculating risk adjustment payments was "arbitrary and capricious". About 20 million Americans have received health insurance coverage through the program known as Obamacare. The White House supported two attempts in Congress past year to repeal the program, which insures about 20 million Americans.

Health law experts are... These include eliminating the individual mandate penalty and broadening the availability of two alternatives to Affordable Care Act policies.

Insurers are pressing the administration to resolve the issue and resume the payments, arguing that premiums will rise for ObamaCare enrollees if funding is cut off. "There is a need to analyze insurers case-by-case and account for their competitive landscapes", said Tinglong Dai, an associate professor of operations management and business analytics at the Johns Hopkins University Carey Business School.

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