Trump administration freezing billions in health insurance payments

Faith Castro
July 15, 2018

The Centers for Medicare and Medicaid Services, the federal agency that oversees ACA funding, said in a statement that navigators are inefficient, signing up a fraction of all ACA customers, and unnecessary as the ACA enters its sixth year and the public is increasingly familiar with health insurance. Trump is doing his damnedest to prevent a repeat of that, to suck people out of Obamacare, just because he can.

Risk adjustment payments are meant to reduce the incentives for insurers to cherry-pick healthy consumers and weed out those with chronic illnesses and other preexisting conditions whose health costs are higher.

If you're been buying insurance through the Affordable Care Act exchanges, here's more news you need to know.

Although small insurance plans and some cooperatives complained that Obamacare risk adjustment skewed in favor of bigger, entrenched players, almost all insurers condemned the CMS ruling to freeze the risk adjustments. Without this program, insurers might have taken on less risk in the market, especially in rural counties. This is the second round of cuts, after CMS reduced funding for navigators by 41 percent, from $62.5 million, last August, and also cut the budget for Obamacare outreach and advertising by 90 percent.

The Affordable Care Act (ACA), which provides access to health care for millions of Americans with pre-existing conditions, came under attack by Republicans in Congress long before it became law in 2010. After three years, two programs expired, with only the risk adjustment program permanent as stipulated by the law. They are now deciding which exchanges they will participate in next year and what premiums they'll charge. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold".

Financing for the 2019 enrollment season is being cut to $10 million from $36 million.

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One of the most popular parts of the Affordable Care Act: the fact no one can be denied coverage, regardless of pre-existing conditions.

Many carriers have already filed preliminary rate requests with state regulators - with some asking for double-digit hikes to shield themselves from other actions the administration and Congress have taken.

CareSource Vice President Scott Brockman says continuing to tweak Obamacare creates additional uncertainty about the program's future. They assisted 42% of enrollees, the agency said. With suspension of the risk adjustment payments, insurers must now contend with another disruption to the market by the time they finalize rates early this fall.

"Risk adjustment is a Congressionally-mandated program that supports both the individual and small group health insurance markets", he said. Anthem declined comment on its specific circumstances.

Though insurers may eventually get the funds once the administration revises the formula, the move is sending shudders through the industry. Fred Ammons, who supervises the Insure Georgia navigator organization, told the New York Times that the move will "virtually eliminate" in-person assistance for complicated Obamacare sign ups. There could have been a "substantive and thoughtful conversation" about what more needs to be done, she said.

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