Health Care Primer: The Sabotage And Retaliation Edition

Modesto Morganelli
Luglio 10, 2018

Billions of dollars in payments to health insurers under the Obamacare health care law were stopped Saturday by the Trump administration.

The Centers for Medicare and Medicaid Services said it had to put the payments on hold, after a USA district court judge ruled the government arrived at the formula that guides the payouts in a flawed way.

The calculated risk adjustment payment for 2017 was $10.4 billion, according to CMS.

The Risk adjustment formula is a key component of Obamacare, allowing for market stabilization.

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". Insurers say the sudden halting of those payments creates uncertainty at a critical time, as they are now developing their premiums for 2019. The CMS, which noted that a federal court in MA found its formula fair, has asked the New Mexico court to reconsider its decision and said it is seeking a quick resolution to the legal issue.

President Donald Trump's administration has used its regulatory powers to undermine the ACA on multiple fronts after the Republican-controlled Congress a year ago failed to repeal and replace the law propelled by Democratic President Barack Obama. The agency says the court ruling also prevents it from collecting additional risk-adjustment funds until the issue is resolved. 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. The court sent the rules back to the Centers for Medicare and Medicaid Services to rework the formula. Many agree-Democrats and Republicans-that a person with a pre-existing condition needs health insurance coverage and should not be denied on that fact.

The suspension comes as insurance companies are hammering out rates for the next enrollment period.

"So much uncertainty put in the market at this point of time is very unnerving", said Ritu Agarwal, senior associate dean of research at the University of Maryland Robert H. Smith School of Business, who follows the health care system. The White House supported two attempts in Congress previous year to repeal the program, which insures about 20 million Americans.

"The Trump administration just keeps pushing their destructive repeal-and-sabotage agenda, no matter the cost to the American people", Brad Woodhouse, the director of Protect Our Care, an advocacy group that supports Obamacare, stated in the New York Times report.

It could encourage more insurers to bow out of the Affordable Care Act.

"It has caused insurer collapses and market exits that reduced competition". Donald Trump's move to gut Obamacare guarantees it.

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