Trump administration halts billions in insurance payments under Obamacare

Trump administration freezes Obamacare payments, citing court decision

But U.S. District Judge James Browning of New Mexico ruled in February that HHS couldn't use statewide average premiums to come up with its risk-adjustment formula because the agency wrongly assumed the ACA required the program to be budget-neutral.

"We were disappointed by the court's recent ruling", Seema Verma, administrator for the Centers for Medicare and Medicaid Services (CMS), which administers the program, told The Wall Street Journal in a statement.

It hardly matters that no tax money is used in these payments, the concept was flawed from the start.

Risk adjustment is an important part of the ACA. Unlike with other ObamaCare subsidy programs, risk adjustment payments shuffle money from insurers with relatively healthy populations to others.

Some health care experts, however, believe that risk adjustment has caused more damage than good and needs urgent fixing. The move brought a sharp response from health insurers warning of market disruptions and higher costs.

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Martin Hickey, the founder of New Mexico Health Connections, the state's health care co-op and the company that filed the lawsuit, believes the court ruling will reduce the prices and benefit consumers. It's a move that could shake up insurance markets.

"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".

Levitt says the administration's announcement was "a little perplexing", given that the legal fight over the conflicting rulings in New Mexico and MA is still ongoing. It added that the move comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates.

CMS cites the late February court ruling in deciding to place a freeze on the $10.4 billion which it collected a year ago, and which ordinarily would be dispersed among high-risk insurers.

"Based on guidance from the Department of Justice, the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare".

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This is distinct from the debate over ObamaCare's cost-sharing payments, which the Trump Administration cut off previous year after a federal judge barred the subsidies that Congress had not appropriated.

President Barack Obama's signature law, the Affordable Care Act was signed into law in March 2010. On the same day, Minuteman Health, Inc. filed a similar complaint in district court in MA.

In the MA case, however, a federal judge upheld the Obamacare formula, the Journal reports.

"The federal government's decision to suspend payment transfers under the ACA's risk adjustment program could have a significant impact on premiums and place an additional burden on people in the community who can least afford it", CareFirst's president and CEO, Brian Pieninck, said in a statement. The CMS has asked Judge Browning to reconsider his ruling and is awaiting a decision.

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