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Winners and losers of Trump’s decision to halt ObamaCare payments
11 July 2018, 06:27 | Melissa Porter
Trump administration halts billions in insurance payments under Obamacare
The risk-adjustment payments - from insurance companies with a majority of healthy clients to those companies insuring people with chronic illnesses - were written into the Affordable Care Act (ACA) as a way to stabilize the system. At stake are billions of dollars in payments to insurers with sicker customers.
Under the latest cuts, so-called navigators who sign up Americans for the ACA, also known as Obamacare, will get $10 million for the year starting in November, down from $36.8 million in the previous year, according to a statement by the Centers for Medicare and Medicaid Services (CMS). It shuffles money from plans with healthier-than-average members to those with larger numbers of sicker, higher-cost members. "In light of this analysis, the Government can not lawfully make the cost-sharing reduction payments", the White House said after ending the payments in October 2017.
The idea is to remove the financial incentive for insurers to "cherry-pick" healthier customers.
Since then, the Department of Labor has issued a rule to broaden the use of one such kind of insurance, called "association health plans".
Late a year ago, it said it would halt so-called cost-sharing payments, which offset some out-of-pocket healthcare costs for low-income patients.
The Trump administration's move "will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices", association president Scott Serota said in a statement. "It will undermine Americans' access to affordable coverage, particularly for those who need medical care the most".
Insurers criticized the payment freeze, arguing it harms consumers and will cause turmoil for the insurance industry as they move to finalize their 2019 rates. The White House supported two attempts in Congress a year ago to repeal the program, which insures about 20 million Americans. "And costs for taxpayers will rise as the federal government spends more on premium subsidies", AHIP said in a statement. But the Saturday announcement via email was unusual for such a major step.
Officials said Saturday that the administration is acting because of conflicting rulings in lawsuits filed by some smaller insurers who question whether they're being fairly treated.
The decision comes after a March 2018 court ruling that found the formula for calculating risk adjustment payments was "arbitrary and capricious".
Many Trump followers often cheer cuts to Obamacare, not knowing that the Affordable Care Act and Obamacare are one in the same.
But despite President Donald Trump's disdain for "Obamacare", enrollment for subsidized private coverage has been fairly steady, with about 10 million people now signed up.
"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.
The latest "Obamacare" flare-up does not affect most people with employer coverage.
NHC says Chris strengthens into a Category 2 hurricane
However by Thursday, it should begin to weaken and will likely become a strong post-tropical cyclone by early Friday. Although Hurricane Chris is headed towards Canada, it will still create severe weather for those on the U.S.