Insurers claim the Trump administration’s decision to withhold billions of dollars in risk adjustment payments could result in higher premiums for millions.
It was confirmed Saturday that $10.4 billion in payments to insurers under Obamacare is suspended due to a court’s ruling over the risk adjustment program in New Mexico. Although officials did not specify how long the suspension would last or what actions could cause payments to resume, the Trump administration called this move temporary.
In a statement from CMS, Administrator Seema Verma said, “we were disappointed by the court’s recent ruling. As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold. 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.”
The U.S. District Court for the District of New Mexico found the risk-adjustment formula to be “contrary to law or arbitrary and capricious.” A judge in Massachusetts upheld the formula instead.
The program pools risk for insurers and prevents insurance companies from only covering healthy people by protecting them from the costs of enrollees with pre-existing conditions.
The Blue Cross Blue Shield Association issued a statement following the court ruling, “we are extremely disappointed that the administration has frozen payment transfers under the Affordable Care Act’s (ACA) risk adjustment program, which is designed to keep costs down for consumers while meeting the medical needs of those requiring significant care,” said President and CEO Scott Serota, adding,
Without a quick resolution to this matter, this action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices. It will undermine Americans’ access to affordable coverage, particularly for those who need medical care the most.
To read more about the effect this move may have, visit NPR
or read the Wall Street Journal article.
Click here for the CMS press release.