Insurers scramble after Trump suspends billions in ObamaCare payments

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

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 Trump administration has temporarily halted billions of dollars in payments to health insurers under the Affordable Care Act's risk adjustment program.

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

The Republican Congress tried to repeal the Affordable Care Act at every turn in 2017 and now they are trying to take away the protection it provides for people with pre-existing conditions.

"Risk adjustment under the ACA has been an example of a well-meaning regulation that has had destructive impacts directly contrary to its intent", Jonathan Halvorson, a health care public policy adviser at consulting firm Sachs Policy Group, stated in an article for The Health Care Blog.

In a separate statement, the CMS said it was "disappointed" by the court's ruling, adding that "billions of dollars in risk adjustment payments and collections are now on hold".

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

Reuters' characterization of the move is that "President Donald Trump's administration has used its regulatory powers to undermine Obamacare after the Republican-controlled Congress a year ago failed to repeal and replace the law". "And costs for taxpayers will rise as the federal government spends more on premium subsidies", AHIP said in a statement.

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

In February, U.S. District Judge James Browning in Albuquerque, N.M., ruled that the formula used by CMS to calculate payments in the risk-adjustment program was flawed and had not been adequately justified by federal regulators. About 20 million Americans have received health insurance coverage through the program known as Obamacare. "It moves us back to some extent to the status quo where people with pre-existing conditions found it very hard to get insurance".

"Without a quick resolution to this matter, this action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices". The White House supported two attempts in Congress past year to repeal the program, which insures about 20 million Americans.

Dr. Dave Weldon, president of the Alliance of Health Care Sharing Ministries, discusses why health care sharing ministries could be a good alternative for people who can't find affordable health care.

But supporters of the ACA criticized the CMS announcement as the latest move by the Trump administration to undermine Obamacare.

It could also encourage more insurers to bow out of Obamacare.

These moves are prompting some insurers to request premium hikes for 2019 in the double digits. "There is a need to analyze insurers case-by-case and account for their competitive landscapes", said Tinglong Dai, an associate professor of operations management and business analytics at the Johns Hopkins University Carey Business School.

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