Trump administration halts billions of dollars of ACA payments

Leslie Hanson
July 10, 2018

The payments insurers expected this fall, based on their 2017 business, amounted to $10.4 billion.

Health care insurance customers could be in for some sticker shock over next year's prices now that the Trump administration says it's freezing payments under an "Obamacare" program that protects insurers with sicker patients from financial losses. While the administration says it is required to stop payments because of the court decision, insurers say the move could result in higher premiums for millions of individuals and small businesses.

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, according to Reuters. The permanent program was meant to reduce the incentive for health insurers to cherry-pick healthy members. But the U.S. Supreme Court upheld the law, finding that the fine consumers faced for not buying insurance was actually a tax.

The announcement came as insurers were awaiting an annual report that usually comes at the end of June, informing them of whether they owe money into the risk adjustment program or will be paid out for the previous year.

Insurance companies responded quickly on Saturday with their disapproval. It sends funds from insurance plans with low-risk enrollees to higher-risk ones. "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". "And costs for taxpayers will rise as the federal government spends more on premium subsidies", the group said.

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", Seema Verma, administrator for the Centers for Medicare and Medicaid Services (CMS), which administers the program, told The Wall Street Journal 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. "It will undermine Americans' access to affordable coverage, particularly those who need medical care the most".

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. Donald Trump's move to gut Obamacare guarantees it. The administration has to have a legal justification for their actions. Some insurances have even expanded their presence in states where they were already operating with help from the Affordable Care Act.

Other reports by Iphone Fresh

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