Thursday, 20 September, 2018

Trump admin expected to suspend some ObamaCare risk adjustment payments

Credit Kaiser Family Foundation Credit Kaiser Family Foundation
Celia Hoffman | 09 July, 2018, 09:09

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.

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. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", CMS administrator Seema Verma reportedly said in a statement. Insurers say, the timing of the decision could mean higher premiums for millions of individuals and small businesses next year.

"This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own".

"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.

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.

The Congressionally mandated risk adjustment program of the Affordable Care Act redistributes funds from plans with lower-risk enrollees to plans with higher-risk enrollees, helping to ensure that sicker individuals can receive coverage by sharing the cost of covering them.

"We urge the Trump administration to back off of this unsafe 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.

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"I think insurers are going to be watching very closely what the administration says in court, and whether this is a sign of further steps to undermine the law, or a good faith effort to try to comply with the judge's order", he says.

Trump and his team have continued to argue that the individual mandate is unconstitutional and has promised to refuse to defend any parts of Obamacare in court.

It also comes as insurers appeared to be warming back up to the ACA.

Insurers say the sudden halting of those payments creates uncertainty at a critical time, as they are now developing their premiums for 2019. 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.

FILE PHOTO: A man fills out an information card during an Affordable Care Act outreach event hosted by Planned Parenthood for the Latino community in Los Angeles, California September 28, 2013.

These moves are prompting some insurers to request premium hikes for 2019 in the double digits.

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