Trump administration halts billions in Obamacare payments to health insurers

Report: WH Suspends $10.4B in Obamacare Insurer Payments

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.

Seema Verma, administrator of the Centers for Medicare and Medicaid Services, listens during a meeting on healthcare reform at the White House.

The calculated risk adjustment payment for 2017 was $10.4 billion, according to CMS.

It's freezing a program that takes payments from insurers with healthier customers and redistributes that money to insurers with sicker customers, in order to protect those insurers from financial losses, the Associated Press reported.

The Trump administration is eliminating most of the funding for grass-roots groups that help Americans get Affordable Care Act insurance and will for the first time urge the groups to promote health plans that bypass the law's consumer protections and required benefits. Health law experts are... "There is a need to analyze insurers case-by-case and account for their competitive landscapes", said Tinglong Dai, an associate professor of operations management and business analytics at the Johns Hopkins University Carey Business School. "It has also led to upstarts, small plans and unprofitable ones paying billions of dollars to larger, more established and profitable insurers".

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.

As reported in The New York Times, the payments seemed created to benefit larger insurers.

Over the weekend arrived some fresh political fury that the Trump Administration is trying to sabotage ObamaCare by suspending something called "risk adjustment" payments. "It moves us back to some extent to the status quo where people with pre-existing conditions found it very hard to get insurance". "That will increase competition, and competition will help keep prices down".

"We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments", AHIP stated. He warned of "turmoil" as insurers finalize their rates for 2019. The White House supported two attempts in Congress past year to repeal the program, which insures about 20 million Americans.

"Costs for taxpayers will rise as the federal government spends more on premium subsidies", the group said.

The Blue Cross Blue Shield Association, whose members are a mainstay of Affordable Care Act coverage said it was "extremely disappointed" with the administration's action. "So it seems like an extreme step to halt this program nationally based on a decision by one district court judge". On the same day, Minuteman Health, Inc. filed a similar complaint in district court in MA.

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

The CMS said a February federal court decision in New Mexico, which ruled it was using a flawed formula to determine its collections and payments amounts, prevented it from continuing the program.

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