Trump administration freezes "risk adjustment" payments to health insurers

Trump administration freezes

Trump administration freezes "risk adjustment" payments to health insurers

On Saturday, the Centers for Medicare and Medicaid Services (CMS) announced the suspension of risk adjustment payments, saying it was a result of a lawsuit filed by New Mexico Health Connections.

The payments were created to stop insurers from losing money on very sick patients, who cost the most to treat.

In its announcement, the CMS reprised arguments it made a year ago that navigators, which operate with the annual grants in the 34 states that rely on the ACA's federal insurance exchange, have been ineffective and are less important than they once were: "As the exchange has grown in visibility and become more familiar to Americans seeking health insurance, the need for federally funded navigators has diminished".

Over the weekend, the administration said it would freeze risk adjustment payments to insurers that cover a large amount of unhealthy consumers - payments meant to stabilize the marketplace by offsetting higher costs associated with riskier patients.

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.

Instead, the Trump administration has used the judge's ruling in New Mexico as a pretext to destabilize the ACA. Association health plans were expanded earlier this year by the administration as a lower cost offering for Americans. "We're now in the midst of the 2019 rate-filing process and it's not clear how the risk-adjustment program will be operating", said Cori Uccello, senior health fellow at the American Academy of Actuaries.

They say the moves will siphon healthier customers out of the Obamacare markets, raising premiums for everyone, and that Republicans will pay a political price for the moves in this November's mid-term elections.

Citing two conflicting federal court cases on the use of statewide average premiums in its decision, CMS said it can not collect or redistribute funds for risk-adjusted payments.

"The program does not cost taxpayers any money and has worked effectively to help balance the cost of caring for those with significant health needs by ensuring that health plans are able to enroll all consumers, regardless of their health status", Serota said in a statement.

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).

The latest "Obamacare" flare-up does not affect most people with employer coverage. Verma said the administration is defending the risk adjustment regulation, even though it was written under the Obama administration.

"It's also taking legal action to abandon the protection for people with pre-existing conditions". John McCain, R-Ariz., cast a crucial "no" vote, with a thumbs down gesture that's become a target of Trump criticism at campaign-style rallies.

The fragile health markets suffered another brow as the U.S government under the leadership of Trump froze billions of dollars of disbursements to Obamacare health insurers. But premiums for people who buy individual coverage and are not eligible for ACA subsidies have continued rising by double digits.

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