Health insurers warned that a move by the Trump administration on Saturday to temporarily suspend a program that was set to pay out $10.4 billion to insurers for covering high-risk individuals a year ago could drive up premium costs and create marketplace uncertainty. The reason? A recent federal court ruling bars distribution of the funds, according to a report by Reuters news.
The Centers for Medicare and Medicaid Services, which oversees the ACA program, announced Saturday that a federal court ruling prevents CMS from making further collections or payments under the risk adjustment program, including an expected $10.4 billion for the 2017 benefit year. Through the program, roughly 20 million Americans have received health care coverage.
President Donald Trump's administration has used its regulatory powers to undermine the ACA on multiple fronts after the Republican-controlled Congress a year ago failed to repeal and replace the law propelled by Democratic President Barack Obama. Insurers say the sudden halting of those payments creates uncertainty at a critical time, as they are now developing their premiums for 2019.
The program is critical to markets under the Affordable Care Act because insurers with healthier consumers enrolled in plans reimburse insurers with sicker and more expensive enrollees. The move brought a sharp response from health insurers warning of market disruptions and higher costs.
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The Affordable Care Act's (ACA) "risk adjustment" program is meant to incentivize health insurers to cover individuals with pre-existing and chronic conditions by collecting money from insurers with relatively healthy enrollees to offset the costs of other insurers with sicker ones. "It will undermine Americans' access to affordable coverage, particularly those who need medical care the most".
Why were the payments suspended?
The move comes after a federal judge ruled that the Obama administration's formula calculating the payments was flawed and inadequately justified by regulators, according to the Journal. 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. "Following through with this latest act of sabotage could raise rates for all consumers even more - on top of the rate hikes they have already caused - and is without a doubt an escalation in the Trump administration's war on people with pre-existing conditions".