Insurers predict 'market disruption' after Trump suspends Obamacare risk payments

Trump admin expected to suspend some ObamaCare risk adjustment payments: report | TheHill

Trump admin expected to suspend some ObamaCare risk adjustment payments: report | TheHill

The Trump administration said Saturday that it is temporarily halting billions of dollars of payments created to help insurers meet the Affordable Care Act requirement that they provide coverage regardless of whether a person is healthy or sick.

In February, U.S. District Judge James Browning in Albuquerque, N.M., ruled that the formula used by CMS to calculate payments in the risk-adjustment program was flawed and had not been adequately justified by federal regulators.

A federal court in MA upheld the same allocation formula in January.

"We were disappointed by the court's recent ruling", Seema Verma, administrator for the Centers for Medicare and Medicaid Services (CMS), which administers the program, told The Wall Street Journal in a statement. "It moves us back to some extent to the status quo where people with pre-existing conditions found it very hard to get insurance".

"Any action to stop disbursements under the risk adjustment program will significantly increase 2019 premiums for millions of individuals and small-business owners, and could result in far fewer health plan choices", said Justine G. Handelman, a senior vice president of the Blue Cross and Blue Shield Association.

"This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own", America's Health Insurance Plans said. "It will undermine Americans' access to affordable care, particularly for those who need medical care the most".

The payments are meant to help stabilize health insurance markets by compensating insurers that had sicker, more expensive enrollees in 2017. The risk-adjustment program has been a source of frustration for small insurers and ACA co-ops that claim the formula makes their membership bases look healthier than they are. In June, the administration said it wouldn't defend central portions of Obamacare in federal court, claiming that key provisions should be invalidated and that the individual mandate is unconstitutional.

But supporters of the ACA criticized the CMS announcement as the latest move by the Trump administration to undermine Obamacare. The move brought a sharp response from health insurers warning of market disruptions and higher costs.

Senate Minority Leader Chuck Schumer said the Republican Party is responsible for problems associated with the Affordable Care Act.

It also comes as insurers appeared to be warming back up to the ACA.