Sunday, 22 July, 2018

Trump administration takes another swipe at 'Obamacare'

Trump administration freezes Obamacare payments, citing court decision Report: WH Suspends $10.4B in Obamacare Insurer Payments
Celia Hoffman | 10 July, 2018, 06:22

The Trump administration has halted billions of dollars in annual payments under the Affordable Care Act's risk adjustment program.

The Centers for Medicare and Medicaid Services (CMS), the agency that oversees the program, cited a recent federal court decision that found the formula for calculating the risk adjustment payments to be flawed.

"As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", she said.

The idea is to remove the financial incentive for insurers to "cherry-pick" healthier customers.

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.

CMS plans to appeal the court's ruling, as the U.S. District Court for the District of MA ruled to uphold the payments. It added that the move comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates.

Insurance companies responded quickly on Saturday with their disapproval.

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"This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own", America's Health Insurance Plans said.

"This action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices", Scott Serota, CEO of the Blue Cross Blue Shield Association, said in a statement. "It will undermine Americans' access to affordable care, particularly for those who need medical care the most".

"Insurers hate uncertainty, and when faced with it tend to raise premiums to hedge their bets", says Larry Levitt, Senior Vice President at the Kaiser Family Foundation. "And costs for taxpayers will rise as the federal government spends more on premium subsidies".

However, if the administration is trying to undermine ObamaCare, payments might not resume anytime soon, and that could lead to lasting damage.

"We were disappointed by the court's recent ruling," CMS Administrator Seema Verma said in a statement.

But to Rodney Whitlock, Vice President of Health Policy at ML Strategies and former Republican congressional aide, it's not perplexing at all. The move is just the newest in a series of attempts by Trump's administration to disrupt the insurance markets that the Affordable Care Act depends on to function.

Democrats, meanwhile, are seizing on the unexpected action by characterizing it as another example of the administration sabotaging ObamaCare, a key Democratic message heading into the November midterm elections. Last month the Department of Justice decided not to defend the law in a court challenge in Texas, jeopardizing the part of the law that protects people with pre-existing conditions from being denied coverage, as NPR reported.

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