Trump administration freezes Obamacare funds

Trump administration says it’s freezing payments under an ‘Obamacare’ program that protects insurers with

The Trump administration's decision to freeze billions in payments to health insurers with plans under Obamacare that cover a higher number of sicker patients could cause health care premiums to rise in 2019.

The Center for Medicare and Medicaid Services (CMS) has suspended payments to health insurers with a large number of sick Obamacare clients. The CMS said it won't be making transfer payments for the 2017 benefit year totaling $10.4 billion.

The announcement came as insurers were awaiting an annual report that usually comes at the end of June, informing them of whether they owe money into the risk adjustment program or will be paid out for the previous year. "It will undermine Americans' access to affordable coverage, particularly for those who need medical care the most".

Risk adjustment is a key aspect of market stabilization under the ACA, also known as Obamacare. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", CMS Administrator Seema Verma said.

America's Health Insurance Plans (AHIP), the trade organization representing health insurers, decried the suspension of the payments.

A federal court in MA upheld the same allocation formula in January.

She noted it is the latest action by the administration of President Donald J. Trump, which has weakened the landmark law that expanded healthcare for many more Americans.

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

"So much uncertainty put in the market at this point of time is very unnerving", said Ritu Agarwal, senior associate dean of research at the University of Maryland Robert H. Smith School of Business, who follows the health care system.

CMS was referring to a February ruling from a federal court in New Mexico that invalidated the risk adjustment formula, and a January ruling from a federal court in MA that upheld it. "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 White House supported two attempts in Congress past year to repeal the program, which insures about 20 million Americans. "This is one of several steps the Trump administration has taken to undermine the ACA".

Dr. Dave Weldon, president of the Alliance of Health Care Sharing Ministries, discusses why health care sharing ministries could be a good alternative for people who can't find affordable health care. These include eliminating the individual mandate penalty and broadening the availability of two alternatives to Affordable Care Act policies. Eventually, experts say, some insurers could simply get fed up and exit ObamaCare markets, leading to fewer choices for consumers.

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