Trump administration halts billions in insurance payments under Obamacare

12 July, 2018, 23:22 | Author: Lillian Steele
  • President Donald Trump speaks about health care from the White House in Washington. The Trump administration says it’s freezing payments under an Obamacare program that protects insurers with sicker patients

Risk adjustment is an important part of the ACA. It added that the move comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates.

Once again, the Trump administration has taken an axe to the Affordable Care Act, temporarily suspending a program that was set to pay out $10.4 billion to insurers for covering high-risk individuals past year. The payments work this way: The government takes money from insurers with healthier, low-risk customers, and gives it to insurers with less-healthy, higher-risk customers. The permanent program was meant to reduce the incentive for health insurers to cherry-pick healthy members.

CMS provided a timeline, noting that after the February 28 decision by the New Mexico federal court, it filed a motion for reconsideration, and on June 21 the court held a hearing on it. CMS is waiting for the court's ruling, it said. But the U.S. Supreme Court upheld the law, finding that the fine consumers faced for not buying insurance was actually a tax. "New Yorkers aren't fooled". Many agree-Democrats and Republicans-that a person with a pre-existing condition needs health insurance coverage and should not be denied on that fact. The move brought a sharp response from health insurers warning of market disruptions and higher costs. "And costs for taxpayers will rise as the federal government spends more on premium subsidies", the group said. In other words, the Trump Administration position in court is in favor of making the payments. In June, the administration said it wouldn't defend central portions of Obamacare in federal court, claiming that key provisions should be invalidated and that the individual mandate is unconstitutional.

On July 29, 2016, New Mexico Health Connections filed a complaint in district court in New Mexico arguing that the use of the statewide average premium was "arbitrary and capricious".

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For the past five years, when insurance has been available through ACA marketplaces for people who do not have access to affordable health benefits through a job, federal health officials have started every spring working with navigator groups on plans for the coming enrollment season. However, under Obamacare, insurance companies can not charge higher premiums, or even deny coverage, to clients with pre-existing conditions.

The CMS statement said the agency will "provide additional guidance shortly on how it will handle other issues relating to risk adjustment payments". The administration has to have a legal justification for their actions.

"The Trump administration just keeps pushing their destructive repeal-and-sabotage agenda, no matter the cost to the American people", the statement reads.

CMS said in a statement that the funds were being cut because people are more familiar with the exchange program, and that the programs enrolled less than 1% of participants a year ago. 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.

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