Trump Administration Cuts Funding For Obamacare Navigator Program

The Trump administration finds another way to throw sand in Obamacare's gears at patients' expense

"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.

"Longer-term, I think that the administration's walk-back of risk-adjustment payments penalizes those payers that did, in fact, attempt to enroll participants without bias to health status, and unfortunately it also rewards those payers that for whatever reason made a decision to play it that much safer and do their best to recruit healthy individuals", Abrams says. The most recent analysis of the issue was done in 2015 by H&R Block, which found that 52 percent of people who enrolled in health insurance through Affordable Care Act marketplaces around the country ended up paying back some of the subsidies.

Risk adjustment is one of three methods built into the 2010 health-care law to help insulate insurance companies from the ACA requirement that they accept all customers for the first time - healthy and sick - without charging more to those who need substantial care.

"Risk adjustment under the ACA has been an example of a well-meaning regulation that has had destructive impacts directly contrary to its intent", Jonathan Halvorson, a health care public policy adviser at consulting firm Sachs Policy Group, stated in an article for The Health Care Blog.

Don't count on it, said Steve Israel, a Boynton Beach, Fla., insurance agent and past president of the Florida Association of Health Underwriters.

But CareFirst and Kaiser could ask to adjust their rates higher given the Trump administration's decision.

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The decision to halt the payments casts further uncertainty over the ACA marketplaces at a time when insurers are finalizing their offerings for open enrollment in November. The judge tossed out the formula used to calculate payments, finding that it was flawed. The counselors, known as navigators, help consumers find an affordable health plan on the ACA exchanges.

Jeffrey Loo, an analyst at CFRA Research, said health insurers are preparing 2019 rates "and this suspension adds financial uncertainty".

For the past five years, when insurance has been available through ACA marketplaces for people who do not have access to affordable health benefits through a job, federal health officials have started every spring working with navigator groups on plans for the coming enrollment season. The Florida group will need to make hard choices about who they serve during open enrollment period that begins in November. Her insurer, Oscar, is boosting rates again for 2019, and Williams is slated to see an increase to $518.33 for a low-level bronze plan. Why the administration waited so long to take action rather than immediately respond to the decision with a justification of its payment formula remains a mystery. In Iowa, Wellmark, a regional insurer, plans to rejoin the ACA market for 2019. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold". While nonprofits operating under the navigator program were previously forbidden from recommending particular health plans, now groups that apply for the grants will be expected to encourage people to buy association health plans or short-term insurance plans.

Citing inefficiencies and other information options for consumers, CMS cut funding to $10 million - down from $63 million in 2016. "Costs for taxpayers will rise as the federal government spends more on premium subsidies", said a statement from America's Health Insurance Plans, a health insurance industry trade group.

CMS now wants the navigators to promote these policies in addition to steering people toward ACA-compliant plans and Medicaid.

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