Trump administration takes another swipe at 'Obamacare'

Leslie Hanson
July 9, 2018

The main insurers' lobby said it will need to see a quick resolution to avoid bigger price hikes next year - and a bigger tab for taxpayers who subsidize qualified customers in the program's web-based exchanges.

Billions of dollars in payments to health insurers under the Obamacare health care law were stopped Saturday by the Trump administration. The idea is to insulate insurance companies from the cost of enrolling people with pre-existing conditions, and remove the incentive for insurance companies to cherry pick healthy people.

The Affordable Care Act's (ACA) "risk adjustment" program is meant to incentivize health insurers to cover individuals with pre-existing and chronic conditions by collecting money from insurers with relatively healthy enrollees to offset the costs of other insurers with sicker ones.

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 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.

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

"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.


"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.

"Normally you would expect an administration to look for ways to minimize the uncertainty and minimize the effect as these cases play out", he says.

But to Rodney Whitlock, Vice President of Health Policy at ML Strategies and former Republican congressional aide, it's not perplexing at all.

Indeed, a series of actions by the administration have undermined the ACA. Last year, the administration halted important subsidies for insurers. The administration has to have a legal justification for their actions.

The CMS makes risk-adjustment payments to insurers to help encourage them to participate in the marketplace and offset the costs of enrolling more expensive - high risk - people in insurance pools. 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.

The suspension of the payments comes amid other efforts by the Trump administration to try to chip away at the landmark health care law.

Other reports by Iphone Fresh

Discuss This Article

FOLLOW OUR NEWSPAPER