Trump administration deals another potential blow to Obamacare

Trump administration takes another swipe at 'Obamacare'

Once again, the Trump administration has taken an axe to the Affordable Care Act, temporarily suspending a program that was set to pay out $10.4 billion to insurers for covering high-risk individuals a year ago.

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

The U.S. agency that administers Obamacare is freezing payments to insurers that cover sicker patients, saying a federal court ruling ties its hands.

Risk-adjustment made up one of the "three R's" that constitute Obamacare's program to stabilize healthcare markets, as the program causes insurers with healthier customers to reimburse insurers with more expensive and sicker enrollees.

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"CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets", Verma said.

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.

CMS said that the amount frozen for the 2017 benefit year is $10.4 billion, which is drawn from insurers to go to other insurers. The strategy is also used by Medicare private insurance plans.

"This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own", America's Health Insurance Plans said.

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The move is expected to add to premium increases next year. "And costs for taxpayers will rise as the federal government spends more on premium subsidies", AHIP said in a statement. "It moves us back to some extent to the status quo where people with pre-existing conditions found it very hard to get insurance".

Risk adjustment is an important part of the ACA. "This action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices". "It will undermine Americans' access to affordable coverage, particularly those who need medical care the most".

The pro-ACA group Protect Our Care issued a statement from its executive director, Brad Woodhouse, Saturday after the administration announced its decision regarding risk penalty payments, characterizing the move as further chipping away at the Affordable Care Act.

The payments in question were meant to offset costs for insurers that had enrollees who were "sicker, more expensive", Reuters reported.

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