Trump administration freezes risk adjustment payments

Trump administration freezes risk adjustment payments

Trump administration freezes risk adjustment payments

The Trump administration on Saturday halted billions of dollars in payments to health insurers under the Obamacare healthcare law, saying that a recent federal court ruling prevents the money from being disbursed.

In the meantime, some health insurers are potentially out billions of dollars.

The risk adjustment program plays an important role in the ACA by pooling risk for insurers, transferring funds from insurers who enroll healthier members for relatively less, to those that take on higher costs in order to enroll sicker members. No taxpayer subsidies are involved. While nonprofits operating under the navigator program were previously forbidden from recommending particular health plans, now groups that apply for the grants will be expected to encourage people to buy association health plans or short-term insurance plans. The funding will also be provided to each organization based on their success levels for enrollment, a measure CMS said would "ensure accountability within the program and avoid rewarding grantees that have failed to meet performance measures".

Many Trump followers often cheer cuts to Obamacare, not knowing that the Affordable Care Act and Obamacare are one in the same.

The Republican-controlled Congress in December passed a law that next year will eliminate the requirement that most Americans have insurance, a move likely to drive healthier people out of insurance market and lead to higher prices for those who are left.

Serota noted that the payments are required by law, and said he believes the administration has the legal authority to continue making them despite the court cases.

Maryland's health insurance companies are concerned that a Trump administration decision to suspend payments that help to cover the costs of the sickest patients will further destabilize the market and could push them to seek even higher premiums on plans consumers already say are too expensive. Arnam said many people spend considerable time learning about health insurance options from a navigator, but enroll later at home.

Rumors that the Trump administration would freeze payments were circulating late last week.

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 administration has said they were disappointed with the New Mexico ruling, and they want to work it out", said Greg Fann, consulting actuary for Axene Health Partners and fellow of the Society of Actuaries.

In February, however, the federal district judge in New Mexico issued a decision voiding the formula used in calculating risk adjustment payments for the 2014-2018 benefit years.

So the suspension of risk adjustment payments could throw the rate-filing process into chaos, said Cynthia Fox, director of health reform and private insurance at Kaiser Family Foundation.

These moves are prompting some insurers to request premium hikes for 2019 in the double digits.

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