Trump administration freezes Obamacare payments, citing court decision

Desiree Burns
July 11, 2018

Over the weekend arrived some fresh political fury that the Trump Administration is trying to sabotage ObamaCare by suspending something called "risk adjustment" payments.

The risk-adjustment program, which does not cost taxpayers any money and is required by law, is created to ensure that health care coverage is available for sicker, higher-cost patients by sharing the cost of covering them.

CMS, which is overseen by the U.S. Department of Health and Human Services, said the move was necessary because of a February ruling by a federal court in New Mexico, which found that the federal government was using an inaccurate formula for allocating the payments.

CMS plans to appeal the court's ruling, as the U.S. District Court for the District of MA ruled to uphold the payments.

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The move should not have been unexpected given the administration's disdain for other provisions of the Affordable Care Act (ACA), leading to the elimination of other key taxpayer-funded subsidies and the outright eradication of the individual mandate through this past winter's tax cut legislation.

CMS said it was "disappointed" by that decision and asked the judge to reconsider, which tends to be faster than the appeals process.

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.

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While imperfect, the risk adjustment program "has helped promote market stability over the past five years", Wehrle said. The White House supported two attempts in Congress previous year to repeal the program, which insures about 20 million Americans. Trump tweeted dozens and dozens of times about Obamacare and its demise a year ago as he pushed the Senate to repeal the law.

The elimination of risk adjustment funds also comes as Maryland officials await a decision from CMS on another funding mechanism they believe would help stabilize the market and provide money to insurers to help pay for expensive patients.

Insurance Commissioner Al Redmer Jr. said that as of now he doesn't expect the latest decision to interrupt the state's rate-setting process.

"We have to be very cautious".

"It has caused insurer collapses and market exits that reduced competition".

The payments can be controversial, Dai said.

"The risk adjustment formula was extremely biased in favor of large, established insurers and discriminated against new and small insurers, including co-ops like ours", Hickey told The New York Times on July 7. In Maryland, Kaiser usually ends up paying CareFirst.

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