Health Care

Trump Administration Halts Payments Under Obamacare Program

Trump Administration Halts Payments Under Obamacare Program”

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.

The Centers for Medicare and Medicaid Services (CMS), which administers ACA programs, said on Saturday that months-old conflicting court rulings related to the risk adjustment formula prevent them from making payments. Initially, the decision could affect $10.4 billion in payments tied to the 2017 benefit year, .

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.

The Blue Cross Blue Shield Association, whose members are a mainstay of Affordable Care Act coverage said it was "extremely disappointed" with the administration's action.

Risk adjustment is a key aspect of market stabilization under the ACA, also known as Obamacare. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", CMS administrator Seema Verma reportedly said in a statement.

In the meantime, some health insurers are potentially out billions of dollars. The CMS has appealed the decision, particularly because a MA court upheld such payments.

Similarly, a year ago the Trump administration ended Obamacare's cost-sharing reduction payments to health insurers.

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"When the rules of the game change after the fact - insurers don't necessarily see the federal government as a particularly reliable partner right now", Levitt says.

The administration argued in its announcement that its hands were tied by conflicting court rulings in New Mexico and MA.

The agency said it had no choice after a U.S. District Court in New Mexico said the payments are invalid, due to the formula used to make them.

"An effective risk adjustment program is crucial to the sound operation of a health insurance marketplace in which individuals, families and small businesses with health needs have access to more affordable, high-quality coverage", said Bill Wehrle, Kaiser Permanente vice president of health insurance exchanges, in a statement.

Insurance companies responded quickly on Saturday with their disapproval.

Since then, it has taken administrative steps to weaken the law, including the removal of the individual mandate - which required everyone to purchase health insurance.

America's Health Insurance Plans, the main health insurance industry trade group, said in a statement that it is "very discouraged" by the Trump administration's decision to freeze payments.



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