Health care insurance customers could be in for some sticker shock over next year's prices now that the Trump administration says it's freezing payments under an "Obamacare" program that protects insurers with sicker patients from financial losses. The reason? A recent federal court ruling bars distribution of the funds, according to a report by Reuters news.
Months-old conflicting court rulings related to the risk adjustment formula are preventing the Centers for Medicare and Medicaid Services (CMS) from making payments. About 20 million Americans have received health insurance coverage through the program known as Obamacare.
Reuters' characterization of the move is that "President Donald Trump's administration has used its regulatory powers to undermine Obamacare after the Republican-controlled Congress a year ago failed to repeal and replace the law". Insurers say the sudden halting of those payments creates uncertainty at a critical time, as they are now developing their premiums for 2019.
The payments are meant to help stabilize health insurance markets by compensating insurers that had sicker, more expensive enrollees in 2017. In October 2017, the White House announced it would end Obamacare cost-sharing payments that helped lower-income enrollees pay for health care.
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The administration has made several other moves in recent years to scale back or halt implementation of certain aspects of the ACA, without replacing it with a better health plan, which was a Trump campaign promise. Small health plans also have far less capital than more established insurers to comfortably make large risk-adjustment payments. Insurers say, the timing of the decision could mean higher premiums for millions of individuals and small businesses next year. "It will undermine Americans' access to affordable coverage, particularly for those who need medical care the most".
Why were the payments suspended?
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. A judge found that the formula used to calculate the payments is flawed.
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. "Following through with this latest act of sabotage could raise rates for all consumers even more".
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