Administration Suspends Billions in Payoffs to Obamacare Insurers | Trending

President Donald Trump speaks about health care from the White House in Washington. The Trump administration says it’s freezing payments under an Obamacare program that protects insurers with sicker patients

Just as more insurers and consumers were entering the ACA individual market and things seemed to be stabilizing, the Trump administration struck a new blow against the health-care sector over the weekend, cutting off the multi-billion dollar risk adjustment payments that compensate insurers for taking on sicker and more expensive patients.

"Enrollment data from previous years show that Navigators failed to enroll a meaningful amount of people", CMS said.

Insurance stocks may be a focus in Monday morning's trading.

Since Republican campaigns to kill Obamacare failed in Congress a year ago, the Trump administration has been taking every opportunity to sabotage the Affordable Care Act. "It enables the country to move away from a market where plans compete to avoid covering or charge more to people with preexisting health conditions, to one where competition is based on quality, affordable care for everyone".

America's Health Insurance Plans, the main health insurance industry trade group, said in a statement that it is "very discouraged" by the Trump administration's decision to freeze payments.

Officials with CareFirst BlueCross BlueShield, one of two Maryland insurers that sell Affordable Care Act plans, said they need the payments to keep that part of their business afloat. The CMS has appealed the decision, particularly because a MA court upheld such payments.

The administration argued in its announcement that its hands were tied by conflicting court rulings in New Mexico and MA.

"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", Scott Serota, president and CEO of The Blue Cross Blue Shield Association, said in a statement.

In a separate statement, the CMS said it was "disappointed" by the court's ruling, adding that "billions of dollars in risk adjustment payments and collections are now on hold".

CMS provided a timeline, noting that after the February 28 decision by the New Mexico federal court, it filed a motion for reconsideration, and on June 21 the court held a hearing on it. CMS is waiting for the court's ruling, it said. "It will allow more companies to get into the insurance market". This is the second round of cuts, after CMS reduced funding for navigators by 41 percent, from $62.5 million, last August, and also cut the budget for Obamacare outreach and advertising by 90 percent.

"It has caused insurer collapses and market exits that reduced competition".

"This decision comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates". Following the decision, CMS asked the court to reconsider its ruling.

The payments can be controversial, Dai said.

"The risk adjustment formula was extremely biased in favor of large, established insurers and discriminated against new and small insurers, including co-ops like ours", Hickey told The New York Times on July 7. In Maryland, Kaiser usually ends up paying CareFirst.

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