Trump Administration Halts Payments to Health Insurers in Attempt to End Obamacare

Moving forward with their near-constant attempts to end Obamacare, the Trump Administration has withheld several payments to the many of the system’s health insurers just as they preparing their premiums for the next health care season.

The administration froze the funds through a system called risk adjustment payment, which distributes some revenue of the health insurance plans to the insurers which handle a significant number of high-cost patients. This system is used to prevent the companies from losing large amounts of money.

According to a statement released over the weekend by the Centers of Medicare and Medicaid Services, the Trump Administration halted payment distributions due to the payments being “based on flawed rules.”

The decision was based on a New Mexico federal district court’s February ruling. It is unclear if the payments will be completely halted, as the Centers of Medicare and Medicaid Services have stated their will to appeal the Trump Administration’s decision. The CMS have also stated that they have support from a court in Massachusetts.

The CMS stated:

“[we are] seeking a quick resolution to the legal issues raised and will inform stakeholders of any update to the status of collections or payments at an appropriate future date.”

This may be a slight relief to the companies, since it is clear that the CMS has no intention to end Obamacare. However, many companies have stated that even a short halting of income can have significant repercussions.

The measure has garnered a strong backlash from the Trump Administration’s opponents as well as from many health insurers. The group America’s Health Insurance Plans said that halting payments could cause insurance receivers to be even more unsure of their services and will cause many premiums to rise in cost. They quickly released a joint statement, which read:

This decision comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates. This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own.”

Some, such as Blue Cross Blue Shield Association President Scott Serota, have even stated that the CMS could potentially move forward with the payments despite the ruling. Serota particularly focused on how the latest decision could keep many Americans from having affordable health care, especially those who need it the most and cannot afford it.

New Jersey Representative Frank Pallone, a Democrat, stated:

By refusing to make risk adjustment payments, the Trump Administration is breaking the law. This is a malicious and intentional attack on our health care system and on Americans’ access to health insurance, plain and simple.”

The risk adjustment program is the only of the three original Affordable Care Act measures targeted directly towards making insurers safe, due to an uncertain and occasionally unpredictable market. The other two programs were due to expire three years after their inception, yet the third was the one designed to remain permanently under the statute.


Featured Image via Flickr/Will O’Neill

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