WH Suspends $10.4B in Obamacare Insurer Payments

Report: WH Suspends $10.4B in Obamacare Insurer Payments

On Saturday, the administration said it would suspend a program that was set to pay out $10.4 billion to insurers for covering high-risk individuals under Obamacare a year ago, saying that a recent federal court ruling prevents the money from being disbursed.

"This is occurring right at the time of year that people (insurers) are making decisions about whether to participate in the exchanges and what premiums to charge if they do", said Eric Hillenbrand, a managing director at consultancy AlixPartners.

The Trump administration on Monday announced another nail in the coffin of Obamacare, declaring it would withhold the payment of risk-adjusted premiums to insurers. The CMS has asked Judge Browning to reconsider his ruling and is awaiting a decision. Instead, the federal government collects money from some insurers that enrolled healthier patients and then transfers money to other insurers who had sicker enrollees.

The risk-adjustment program doesn't involve taxpayer money. Last fall President Trump signed an executive order expanding access to association health plans and short-term limited-duration insurance.

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In justifying the cuts, CMS said the program is an "established marketplace" heading into its sixth year, so many people are more familiar with it. Small insurers often complain about risk adjustment payments because they end up paying their larger competitors, who tend to have the sickest patients.

The Trump administration is eliminating most of the funding for grass-roots groups that help Americans get Affordable Care Act insurance and will for the first time urge the groups to promote health plans that bypass the law's consumer protections and required benefits. "It will create more market uncertainty and increase premiums for many health plans - putting a heavier burden on small businesses and consumers, and reducing coverage options", AHIP said. "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 Blue Cross Blue Shield Association, whose members are a mainstay of Affordable Care Act coverage said it was "extremely disappointed" with the administration's action. However, Republican lawmakers and the Trump administration have made a series of moves meant to weaken the health law, such as halting subsidies that covered some consumers' out-of-pocket costs and eliminating the penalty for not having insurance.

In its announcement, CMS said the private sector is more cost-effective, so people looking for health coverage should be encouraged to go to insurance agents and brokers (who may receive a commission, unlike navigators). New Mexico's ruling alone isn't enough to freeze payments, unless, he says, it's a "politically motivated" move to further disrupt the ACA.

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