The Trump administration said Saturday that it is temporarily halting billions of dollars of payments created to help insurers meet the Affordable Care Act requirement that they provide coverage regardless of whether a person is healthy or sick.
People familiar with the plans said that the Center for Medicare and Medicaid Services (CMS) is planning to temporarily suspend some risk-adjustment payments stemming from 2017 business this fall as well as payments next year that would reflect 2018 business.
At stake is more than $10 billion in "risk adjustment" payments - a feature of the 2010 health law that requires insurers with healthier consumers to reimburse plans that end up with costlier, sicker patients, so the market balances out.
The move is expected to add to premium increases next year.More news: Starbucks to scrap plastic straws globally by 2020
America's Health Insurance Plans (AHIP), the trade organization representing health insurers, decried the suspension of the payments. No taxpayer subsidies are involved. It's a move that could shake up insurance markets. "The decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own", the group said.
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.
The payments in question were meant to offset costs for insurers that had enrollees who were "sicker, more expensive", Reuters reported. "It will undermine Americans' access to affordable care, particularly for those who need medical care the most".
Risk adjustment is a key aspect of market stabilization under the ACA, also known as Obamacare.More news: Xiaomi's shares open 2.9% down on debut in Hong Kong
"I think insurers are going to be watching very closely what the administration says in court, and whether this is a sign of further steps to undermine the law, or a good faith effort to try to comply with the judge's order", he says.
The Trump administration has halted billions of dollars of Obamacare payments to insurers due to a court ruling. The government collects the money from health insurers with relatively healthy enrollees, who cost less to insure.
Trump continues to attack Obamacare even as almost a dozen insurers have started to warm to the program with at least a dozen states seeing an increase in the number of insurers participating in the healthcare exchange.
The mainstream media report offered more criticism from supporters of the Affordable Care Act.More news: Formula One: Eric Boullier Resigns As McLaren's Racing Director