Published: Mon, July 09, 2018
Medical | By Johnnie Horton

Trump administration halts billions of dollars of ACA payments

Trump administration halts billions of dollars of ACA payments

WASHINGTON-The Trump administration's move to suspend billions of dollars in payments that insurers expect injects new uncertainty into the Affordable Care Act's insurance markets right as the companies are deciding next year's rates.

The Centers for Medicare and Medicaid Services (CMS), which administers ACA programs, said on Saturday that months-old conflicting court rulings related to the risk adjustment formula prevent them from making payments. But another district court in MA upheld the formula.

While the administration says it is required to stop payments because of the court decision, insurers say the move could result in higher premiums for millions of individuals and small businesses. Small health plans also have far less capital than more established insurers to comfortably make large risk-adjustment payments.

CMS administrator Seema Verma said in a statement the administration was "disappointed" in the February ruling and that CMS has asked the court to reconsider and "hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans".

CMS was expected to put out a report at the end of June regarding the payments, but that report has not yet been released. All in all, the program was slated to shift $10.4 billion among insurers in 2017, according to the agency.

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America's Health Insurance Plans (AHIP), the trade organization representing health insurers, decried the suspension of the payments.

"This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own". The ruling from New Mexico US District Court Judge Thomas Browning, says the federal government has been using an "arbitrary and capricious" method to determine payments. It's a move that could shake up insurance markets.

CMS was referring to a February ruling from a federal court in New Mexico that invalidated the risk adjustment formula, and a January ruling from a federal court in MA that upheld it. "It will undermine Americans' access to affordable coverage, particularly for those who need medical care the most".

The payments in question were meant to offset costs for insurers that had enrollees who were "sicker, more expensive", Reuters reported.

Trump and his team have continued to argue that the individual mandate is unconstitutional and has promised to refuse to defend any parts of Obamacare in court. The government collects the money from health insurers with relatively healthy enrollees, who cost less to insure.

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