Trump Administration Freezes Payments to Affordable Care Act Insurers with Sicker Patients

The Trump administration is taking another swipe at Obamacare by suspending payments to insurance companies

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.

But U.S. District Judge James Browning of New Mexico ruled in February that HHS couldn't use statewide average premiums to come up with its risk-adjustment formula because the agency wrongly assumed the ACA required the program to be budget-neutral.

CMS plans to appeal the court's ruling, as the U.S. District Court for the District of MA ruled to uphold the payments.

"We urge the Trump administration to back off of this unsafe and destabilizing plan, and instead begin working on bipartisan solutions to make coverage more affordable", said Brad Woodhouse, the executive director of Protect Our Care, a progressive group that supports Obamacare. It's a move that could shake up insurance markets. "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", said CMS Administrator Seema Verma.

The decision comes after a March 2018 court ruling that found the formula for calculating risk adjustment payments was "arbitrary and capricious".

"This action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices", Serota said in a statement.

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The program takes payments from insurers with healthier customers and redistributes the money to companies with sicker enrollees. "It will undermine Americans' access to affordable care, particularly for those who need medical care the most".

The CMS statement said the agency will "provide additional guidance shortly on how it will handle other issues relating to risk adjustment payments". The move brought a sharp response from health insurers warning of market disruptions and higher costs.

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.

Still, insurers are grappling with changes that the Trump administration and Congress have made to Obamacare for 2019.

FILE PHOTO: A man fills out an information card during an Affordable Care Act outreach event hosted by Planned Parenthood for the Latino community in Los Angeles, California September 28, 2013.

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