Administration Suspends Billions in Payoffs to Obamacare Insurers | Trending

Leslie Hanson
July 11, 2018

It shuffles money from plans with healthier-than-average members to those with larger numbers of sicker, higher-cost members.

Under the risk adjustment program, insurers with healthier patients pay those with sicker patients. About $10.4 billion was slated to be transferred past year.

The move should not have been unexpected given the administration's disdain for other provisions of the Affordable Care Act (ACA), leading to the elimination of other key taxpayer-funded subsidies and the outright eradication of the individual mandate through this past winter's tax cut legislation.

Trump administrators suspended the payments over a February ruling by a federal district court in New Mexico, according to the reports. According to advocates of ACA, also known as Obamacare, the risk adjustment program helps to ensure coverage is available for high-need patients by sharing the cost of covering them.

"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", Scott Serota, president and CEO of The Blue Cross Blue Shield Association, said in a statement.

This risk adjustment program was created to "stabilize" the insurance markets by making sure that there were several companies in each market vying for customers, thus theoretically keeping premiums reasonable.


A federal court in MA upheld the same allocation formula in January.

The Centers for Medicare & Medicaid Services announced Tuesday that it would provide only $10 million for the navigator program for this fall's open enrollment season. "CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets". The Maryland Insurance Administration has a hearing scheduled for July 31.

President Donald Trump's administration has used its regulatory powers to undermine the ACA on multiple fronts after the Republican-controlled Congress previous year failed to repeal and replace the law propelled by Democratic President Barack Obama. Paying off companies that lose money was supposed to be a temporary adjustment to changing markets. The permanent program was meant to reduce the incentive for health insurers to cherry-pick healthy members.

The news comes on the heels of many predicting better days for insurers in the ACA markets.

Insurance Commissioner Al Redmer Jr. said that as of now he doesn't expect the latest decision to interrupt the state's rate-setting process. In other words, the Trump Administration position in court is in favor of making the payments.

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

Other reports by Iphone Fresh

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