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ibusinesslines.com December 10, 2018


Insurers scramble after Trump suspends billions in ObamaCare payments

10 July 2018, 09:24 | Melissa Porter

Insurers scramble after Trump suspends billions in ObamaCare payments

Donald Trump

The Trump administration said Saturday it's been forced to freeze critical Obamacare payments due to a federal court decision in New Mexico, potentially causing more instability in the program's fragile markets.

Officials from the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees ObamaCare, have been reaching out to insurance industry officials.

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 Republican Congress tried to repeal the Affordable Care Act at every turn in 2017 and now they are trying to take away the protection it provides for people with pre-existing conditions.

The Risk adjustment formula is a key component of Obamacare, allowing for market stabilization. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", CMS Administrator Seema Verma said. At stake are billions of dollars in payments to insurers with sicker customers.

CMS plans to appeal the court's ruling, as the U.S. District Court for the District of MA ruled to uphold the payments.


President Donald Trump's administration has used its regulatory powers to undermine the ACA on multiple fronts after the Republican-controlled Congress previous year failed to repeal and replace the law propelled by Democratic President Barack Obama. "And costs for taxpayers will rise as the federal government spends more on premium subsidies", the group said. "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".

The U.S. agency that administers Obamacare is freezing payments to insurers that cover sicker patients, saying a federal court ruling ties its hands. Insurers say, the timing of the decision could mean higher premiums for millions of individuals and small businesses next year. It's a move that could shake up insurance markets.

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.

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

CMS was referring to a February ruling from a federal court in New Mexico that invalidated the risk adjustment formula, and a January ruling from a federal court in MA that upheld it. The insurers have requested average rate increases for 2019 that range from 18.5 percent to 91.4 percent, depending on the type of plan.



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