Trump Administration Halts Payments Under Obamacare Program

President Donald Trump speaks about health care from the White House in Washington. The Trump administration says it’s freezing payments under an Obamacare program that protects insurers with sicker patients

President Donald Trump speaks about health care from the White House in Washington. The Trump administration says it’s freezing payments under an Obamacare program that protects insurers with sicker patients

The Trump administration is halting billions of dollars in payments required under the ACA, citing a district court decision in New Mexico from earlier this year. The cuts to grass-roots groups around the country was announced three days after health officials revealed that, because of a pending lawsuit, they were suspending a program created by the law to even out the burden on health insurers whose customers are especially unhealthy or sick.

The announcement was made by Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, and was precipitated by a New Mexico court ruling that suggested the calculations for the risk-adjusted premiums were flawed even despite a MA ruling that validated them. The CMS has appealed the decision, particularly because a MA court upheld such payments.

Navigators and other advocates push back on that claim, saying that navigators help enroll some of the people who most need help, such as those who don't speak English well or those in rural areas. "The executive order the president signed, not long after he got to the White House after the [Inaugural] Parade was effectively, 'We're declaring war on the Affordable Care Act.'" Whitlock says, the goal has been to make the marketplace as inhospitable as possible for participating plans, and this is just one more step in that direction. "CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets". In January a federal court in MA ruled the formula wasn't arbitrary and capricious. Insurers say the sudden halting of those payments creates uncertainty at a critical time, as they are now developing their premiums for 2019.

This is distinct from the debate over ObamaCare's cost-sharing payments, which the Trump Administration cut off past year after a federal judge barred the subsidies that Congress had not appropriated.

Indeed, a series of actions by the administration have undermined the ACA.

The Trump administration has suspended more than $10 billion in Obamacare payments to insurance companies that lost money on state insurance exchanges. These include eliminating the individual mandate penalty and broadening the availability of two alternatives to Affordable Care Act policies.

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.

Martin Hickey, the founder of New Mexico Health Connections, the state's health care co-op and the company that filed the lawsuit, believes the court ruling will reduce the prices and benefit consumers.

By the way, this rule was propagated by the Obama Administration, not President Trump.