Trump administration halts billions of dollars of ACA payments

Ebony Scott
July 11, 2018

"As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", she said.

"This is occurring right at the time of year that people (insurers) are making decisions about whether to participate in the exchanges and what premiums to charge if they do", said Eric Hillenbrand, a managing director at consultancy AlixPartners.

President Donald Trump's administration is freezing billions of dollars in payments to health insurers under the Affordable Care Act's risk adjustment program.

The new reduction of help for navigators, announced late Tuesday afternoon by the Centers for Medicare and Medicaid Services, fits within a pattern of moves by the administration to weaken the sweeping health-care law that President Trump has vowed to demolish.

The risk-adjusted premium pool takes money from healthier patients paying for health care and redistributes it to the less healthy, more needy patients to pay for higher premiums.

The idea is to remove the financial incentive for insurers to "cherry-pick" healthier customers.

The U.S. Court for the District of New Mexico ruled the methodology used by the federal government to collect the payments was "arbitrary and capricious".

In January this year, the federal district judge in MA upheld the methodology used by the federal government to calculate risk adjustment payments.

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The announcement came as insurers were awaiting an annual report that usually comes at the end of June, informing them of whether they owe money into the risk adjustment program or will be paid out for the previous year.

The Blue Cross Blue Shield Association, a federation of 36 Blue Cross and Blue Shield companies nationwide, also expressed disapproval at the move, saying it could create "turmoil" in the market.

The payments are meant to help stabilise health insurance markets by compensating insurers that had sicker, more expensive enrollees in 2017. Obamacare's mandated coverage of many items that most people don't need is the real problem. This is the second round of cuts, after CMS reduced funding for navigators by 41 percent, from $62.5 million, last August, and also cut the budget for Obamacare outreach and advertising by 90 percent. "It's time for the navigator program to evolve, which is why we are announcing a new direction for the program today", said CMS administrator Seema Verma. Following the decision, CMS asked the court to reconsider its ruling.

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

Indeed, a series of actions by the administration have undermined the ACA. However, under Obamacare, insurance companies can not charge higher premiums, or even deny coverage, to clients with pre-existing conditions.

Rumors that the Trump administration would freeze payments were circulating late last week.

Democrats say that the cuts are more evidence of Trump officials sabotaging the health law.

Other reports by GizPress

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