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Trump administration halts billions in Obamacare payments to health insurers
09 July 2018, 08:11 | Silvia Roy
The Trump administration is halting billions of dollars of payments to insurers under the Affordable Care Act's risk-adjustment program, a move that further disrupts the insurance market and could lead to more premium increases next year.
The Wall Street Journal reported on Friday that the Centers for Medicare and Medicaid Services (CMS), the agency that oversees the program, is considering the temporary halt of payments to insurers this fall and next fall. Initially, the decision could affect $10.4 billion in payments tied to the 2017 benefit year, . "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", AHIP said.
It has also scaled back the advertising budget for Obamacare healthcare plans during the open-enrollment period by about 90 percent.
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. The ruling from New Mexico US District Court Judge Thomas Browning, says the federal government has been using an "arbitrary and capricious" method to determine payments. "It moves us back to some extent to the status quo where people with pre-existing conditions found it very hard to get insurance".
"This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own. It will undermine Americans' access to affordable coverage, particularly for those who need medical care the most". The goal is for insurers to compete based on the value of their plans, not just attempting to attract healthier customers. The risk-adjustment program has been a source of frustration for small insurers and ACA co-ops that claim the formula makes their membership bases look healthier than they are.
"I think insurers are going to be watching very closely what the administration says in court, and whether this is a sign of further steps to undermine the law, or a good faith effort to try to comply with the judge's order", he says. The move brought a sharp response from health insurers warning of market disruptions and higher costs.
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The Trump administration has halted billions of dollars of Obamacare payments to insurers due to a court ruling.
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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