WH Suspends $10.4B in Obamacare Insurer Payments

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

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 past year could drive up premium costs and create marketplace uncertainty.

The Wall Street Journal reported on Friday that the Centers for Medicare and Medicaid Services (CMS), the agency that oversees the program, is considering the temporary halt of payments to insurers this fall and next fall. All in all, the program was slated to shift $10.4 billion among insurers in 2017, according to the agency. "It will create more market uncertainty and increase premiums for many health plans - putting a heavier burden on small businesses and consumers, and reducing coverage options", AHIP said. America's Health Insurance Plans said it was "very discouraged" by the CMS' decision, which comes as insurers determine their premiums for 2019 and states review those proposals. No taxpayer subsidies are involved.

"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".

The payments in question were meant to offset costs for insurers that had enrollees who were "sicker, more expensive", Reuters reported. "It will undermine Americans' access to affordable coverage, particularly for those who need medical care the most".


But supporters of the ACA criticized the CMS announcement as the latest move by the Trump administration to undermine Obamacare.

In February, U.S. District Judge James Browning in Albuquerque, N.M., ruled that the formula used by CMS to calculate payments in the risk-adjustment program was flawed and had not been adequately justified by federal regulators. The risk-adjustment program has been a source of frustration for small insurers and ACA co-ops that claim the formula makes their membership bases look healthier than they are. To do that, the government collects money from health insurers with enrollees who were healthier and as a result "cost less to insure". These include eliminating the individual mandate penalty and broadening the availability of two alternatives to Affordable Care Act policies.

Trump continues to attack Obamacare even as almost a dozen insurers have started to warm to the program with at least a dozen states seeing an increase in the number of insurers participating in the healthcare exchange.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.