The Trump administration said Saturday it's been forced to freeze critical Obamacare payments due to a federal court decision in New Mexico, potentially causing more instability in the program's fragile markets.
The Wall Street Journal reported on Friday that the Centers for Medicare and Medicaid Services (CMS), the agency that oversees the program, is considering the temporary halt of payments to insurers this fall and next fall. All in all, the program was slated to shift $10.4 billion among insurers in 2017, according to the agency.
Under the risk adjustment program, insurers with healthier patients pay those with sicker patients. The move is just the newest in a series of attempts by Trump's administration to disrupt the insurance markets that the Affordable Care Act depends on to function.
Risk adjustment is a key aspect of market stabilization under the ACA, also known as Obamacare. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold". At stake are billions of dollars in payments to insurers with sicker customers.
In the MA case, however, a federal judge upheld the Obamacare formula, the Journal reports.
More broadly, the move contributes to a string of actions from the Trump administration, including the cancellation of other ObamaCare payments past year, that have added to insurers' uncertainty and frustration. "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.
Trump administrators suspended the payments over a February ruling by a federal district court in New Mexico, according to the reports. "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". "It moves us back to some extent to the status quo where people with pre-existing conditions found it very hard to get insurance".
The move is expected to add to premium increases next year. The White House supported two attempts in Congress previous year to repeal the program, which insures about 20 million Americans.
Insurers are pressing the administration to resolve the issue and resume the payments, arguing that premiums will rise for ObamaCare enrollees if funding is cut off.
Since then, it has taken administrative steps to weaken the law, including the removal of the individual mandate - which required everyone to purchase health insurance. Some insurances have even expanded their presence in states where they were already operating with help from the Affordable Care Act.
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