WH Suspends $10.4B in Obamacare Insurer Payments

Report: WH Suspends $10.4B in Obamacare Insurer Payments

Trump administration halts billions in insurance payments under Obamacare

U.S. President Donald Trump departs after speaking at a Make America Great Again rally in Great Falls, Montana, U.S., July 5, 2018.

The Centers for Medicare & Medicaid Services announced over the weekend that it was freezing billions of dollars in so-called risk adjustment payments for plans under the Affordable Care Act, also known as Obamacare, because of a court decision earlier this year that deemed the formula for determining these payments unlawful. Through the program, roughly 20 million Americans have received health care coverage.

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, which does not cost taxpayers any money and is required by law, is created to ensure that health care coverage is available for sicker, higher-cost patients by sharing the cost of covering them. The Trump administration claims it is obligated to suspend these payments because of a court ruling out of New Mexico questioning their legality, but there is reason to be skeptical.

The administration has made several other moves in recent years to scale back or halt implementation of certain aspects of the ACA.

"We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments", the group said in a statement Saturday. The CMS, which noted that a federal court in MA found its formula fair, has asked the New Mexico court to reconsider its decision and said it is seeking a quick resolution to the legal issue.

The administration "has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows (the government) to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets", she said. "In light of this analysis, the Government can not lawfully make the cost-sharing reduction payments", the White House said after ending the payments in October 2017.

Officials with CareFirst BlueCross BlueShield, one of two Maryland insurers that sell Affordable Care Act plans, said they need the payments to keep that part of their business afloat. It's a move that could shake up insurance markets.

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

The Trump administration announced Tuesday it is making further cuts to the "navigator" program that provides in-person assistance to people seeking coverage on Obamacare's web-based marketplace. Insurers were entering or returning to at least a dozen states for 2019 enrollment, while others were expanding their presence in the states in which they operate. The program does not use any taxpayer dollars.

The slash in funding represents the latest efforts by the Trump Administration to undermine former President Barack Obama's cornerstone legislative achievement.

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