Trump administration halts billions of dollars of ACA payments

Modesto Morganelli
Luglio 11, 2018

It could encourage more insurers to bow out of the Affordable Care Act. The move brought a sharp response from health insurers warning of market disruptions and higher costs.

Trump administration officials said they were forced to make the cuts after a federal court in New Mexico ruled in February that the formula for calculating risk adjustment could not use a statewide average premium.

The Trump administration is eliminating most of the funding for grass-roots groups that help Americans get Affordable Care Act insurance and will for the first time urge the groups to promote health plans that bypass the law's consumer protections and required benefits. Small insurers often complain about risk adjustment payments because they end up paying their larger competitors, who tend to have the sickest patients.

While some may say this means no government money is involved, this ignores the concern expressed in the New Mexico court decision.

The Trump administration has made no secret of its hostility to the healthcare program, enacted in 2010. The idea is to insulate insurance companies from the cost of enrolling people with pre-existing conditions, and remove the incentive for insurance companies to cherry pick healthy people. "That will increase competition, and competition will help keep prices down".

"An effective risk adjustment program is crucial to the sound operation of a health insurance marketplace in which individuals, families and small businesses with health needs have access to more affordable, high-quality coverage", said Bill Wehrle, Kaiser Permanente vice president of health insurance exchanges, in a statement. New Mexico's ruling alone isn't enough to freeze payments, unless, he says, it's a "politically motivated" move to further disrupt the ACA. It added that the move comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates.

The mainstream media report offered more criticism from supporters of the Affordable Care Act. "And costs for taxpayers will rise as the federal government spends more on premium subsidies", the group said. The left is complaining that HHS halted the payments too casually, but on all the evidence the Trump Administration is trying to abide by the ruling while the courts resolve the dispute. On the same day, Minuteman Health, Inc. filed a similar complaint in district court in MA.

In January this year, the federal district judge in MA upheld the methodology used by the federal government to calculate risk adjustment payments. Citing conflicting federal court decisions on the program, the CMS said it can not collect or disburse funds under the risk-adjustment program. The CMS has asked Judge Browning to reconsider his ruling and is awaiting a decision.

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