Trump administration halts billions in insurance payments under Obamacare

  • Trump administration halts billions in insurance payments under Obamacare

Trump administration halts billions in insurance payments under Obamacare

The Trump administration has halted billions of dollars in annual payments under the Affordable Care Act's risk adjustment program. Citing conflicting federal court decisions on the program, the CMS said it can not collect or disburse funds under the risk-adjustment program.

CMS said that the amount frozen for the 2017 benefit year is $10.4 billion, which is drawn from insurers to go to other insurers. 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. The move is just the newest in a series of attempts by Trump's administration to disrupt the insurance markets that the Affordable Care Act depends on to function.

While imperfect, the risk adjustment program "has helped promote market stability over the past five years", Wehrle said. "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. Insurers say the sudden halting of those payments creates uncertainty at a critical time, as they are now developing their premiums for 2019.

Trump's team is considering the move after a federal court decision found the formula for calculating the risk adjustment payments to be flawed.

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".

"The federal government's decision to suspend payment transfers under the ACA's risk adjustment program could have a significant impact on premiums and place an additional burden on people in the community who can least afford it", CareFirst's president and CEO, Brian Pieninck, said in a statement.

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. America's Health Insurance Plans said it was "very discouraged" by the CMS' decision, which comes as insurers determine their premiums for 2019 and states review those proposals.

"We were disappointed by the court's recent ruling". CMS says the New Mexico court's ruling bars "CMS from collecting or making payments under the current methodology, which uses the statewide average premium". Overall, the momentum has been positive, with numerous major insurers following the broader market's upward momentum. It's a move that could shake up insurance markets. Eventually, experts say, some insurers could simply get fed up and exit ObamaCare markets, leading to fewer choices for consumers.