Trump Administration Freezes Payments Required By The Affordable Care Act

Trump Administration Freezes Payments Required By The Affordable Care Act

The Trump administration is halting billions of dollars of payments to insurers under the Affordable Care Act's risk-adjustment program, a move that further disrupts the insurance market and could lead to more premium increases next year.

While imperfect, the risk adjustment program "has helped promote market stability over the past five years", Wehrle said.

The Trump administration has suspended more than $10 billion in Obamacare payments to insurance companies that lost money on state insurance exchanges. "It's time for the navigator program to evolve, which is why we are announcing a new direction for the program today", said CMS administrator Seema Verma. The cuts to grass-roots groups around the country was announced three days after health officials revealed that, because of a pending lawsuit, they were suspending a program created by the law to even out the burden on health insurers whose customers are especially unhealthy or sick.

The move should not have been unexpected given the administration's disdain for other provisions of the Affordable Care Act (ACA), leading to the elimination of other key taxpayer-funded subsidies and the outright eradication of the individual mandate through this past winter's tax cut legislation. The idea is to insulate insurance companies from the cost of enrolling people with pre-existing conditions, and remove the incentive for insurance companies to cherry pick healthy people.

Since then, the Department of Labor has issued a rule to broaden the use of one such kind of insurance, called "association health plans".


Critics said it was just the latest example of the Trump administration undermining the ACA and harming consumers who purchase individual policies. Small insurers often complain about risk adjustment payments because they end up paying their larger competitors, who tend to have the sickest patients.

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.

FILE PHOTO: A man fills out an information card during an Affordable Care Act outreach event hosted by Planned Parenthood for the Latino community in Los Angeles, California September 28, 2013.

The agency said it had no choice after a U.S. District Court in New Mexico said the payments are invalid, due to the formula used to make them. About 20 million Americans have received health insurance coverage through the programme.

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.

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