The groups say the U.S. Centers for Medicare and Medicaid Services could quickly resume distributing the risk-adjustment funds by issuing what's known as an interim final rule for the program. If there is an imbalance of high-risk customers among companies, the government uses a formula to redistribute money from less-burdened companies to more-burdened ones.
Risk adjustment payments are meant to reduce the incentives for insurers to cherry-pick healthy consumers and weed out those with chronic illnesses and other preexisting conditions whose health costs are higher.
That is down from $37 million to the 2018 program year and from $63 million to 2017. CMS officials said they are looking for a quick resolution to the legal issues raised.
CMS is freezing $10.4 billion in Affordable Care Act risk-adjusted payments, created to stabilize the insurance market by redistributing money to insurers with higher-cost members.More news: Anderson has his work cut out against Isner in Wimbledon semifinal
Insurers are frustrated by the decision to halt the payments, with America's Health Insurance Plans warning of "serious consequences for millions of consumers", while Blue Cross Blue Shield Association CEO Scott Serota said the decision will "significantly increase 2019 premiums".
The suspension of risk adjustment payment will also have the effect of destabilizing the ACA marketplace.
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 previous year. In January a federal court in MA ruled the formula wasn't arbitrary and capricious. "And costs for taxpayers will rise as the federal government spends more on premium subsidies", AHIP said in a statement. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold".
The Trump White House has been busy separating migrant families and plotting the demise of Roe v. Wade in recent weeks, but don't worry: they haven't forgotten about their quest to make it harder for Americans to obtain adequate health insurance.More news: Trump claims victory over Nato allies to hike spending on defence
Insurance companies are setting their rates now for the ACA's November enrollment period, so the loss of risk adjustment payments is sure to drive up premiums regardless of whether the payments are resumed at some future point. The Maryland Insurance Administration has a hearing scheduled for July 31. "The Trump administration needs to stop playing Russian Roulette with our health care system". The move is the latest effort by the Trump administration to undermine the Affordable Care Act. This introduces uncertainty into the ACA markets just as insurers are deciding next year's rates. Insurance Commissioner Kreidler offered the following statement.
By the way, this rule was propagated by the Obama Administration, not President Trump. The judge tossed out the formula used to calculate payments, finding that it was flawed.
"We have to be very cautious". If that doesn't happen, some insurers may need to boost their premiums for 2019, she said. Small insurers often complain about risk adjustment payments because they end up paying their larger competitors, who tend to have the sickest patients.More news: Trump falsely claims credit on North Atlantic Treaty Organisation spending