Trump administration halts billions in insurance payments under Obamacare

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

The decision could be a big financial hit for some insurers and may lead to higher insurance rates in some cases, critics say.

The Trump administration announced Saturday that it will temporarily halt billions of dollars in payments under the Affordable Care Act's risk adjustment program, a move that could shake up insurance markets.

On Feb. 28, 2018, a federal judge in New Mexico decided that the use of the statewide average premium formula to calculate risk adjustment payments was flawed.

"We were disappointed by the court's recent ruling". The program transfers funding from plans with lower-risk enrollees to higher-risk ones in an effort to even out the market and "encourage insurers to compete based on the value and efficiency of their plans rather than by attracting healthier enrollees", according to the Kaiser Family Foundation. "It will allow more companies to get into the insurance market". The CMS has appealed the decision, particularly because a MA court upheld such payments.

Under the risk adjustment program, insurers with healthier patients pay those with sicker patients.

America's Health Insurance Plans, the trade organization representing health insurers, issued a statement saying it was "discouraged" by the decision to freeze risk adjustment payments.

"It will create more market uncertainty and increase premiums for many health plans - putting a heavier burden on small businesses and consumers, and reducing coverage options".

While imperfect, the risk adjustment program "has helped promote market stability over the past five years", Wehrle said. "In light of this analysis, the Government can not lawfully make the cost-sharing reduction payments", the White House said after ending the payments in October 2017.

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The bottom line is that the Trump administration is making good on its promise to rid Americans of Obamacare, with or without the help of the legislature.

Levitt says the administration's announcement was "a little perplexing", given that the legal fight over the conflicting rulings in New Mexico and MA is still ongoing.

Tell the Republican Congress and administration to quit playing politics with our health.

"We urge the Trump administration to back off of this risky 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. Last month the Department of Justice decided not to defend the law in a court challenge in Texas, jeopardizing the part of the law that protects people with pre-existing conditions from being denied coverage, as NPR reported.

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

"They can't just say, 'Well, we're new, we don't like what the previous guys did, so we're going to do something different, '" Whitlock says. The administration has to have a legal justification for their actions. It raises the cost of insurance for healthy, younger consumers, keeping them off the Obamacare exchanges and forcing insurance companies to provide coverage to too many older, sicker Americans.

Martin Hickey, the founder of New Mexico Health Connections, the state's health care co-op and the company that filed the lawsuit, believes the court ruling will reduce the prices and benefit consumers.

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