Trump Suspends Obamacare Payments To Insurers

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The Trump administration said Saturday that it is temporarily halting billions of dollars of payments created to help insurers meet the Affordable Care Act requirement that they provide coverage regardless of whether a person is healthy or sick.

The federal court ruling prevents the agency, which administers the Obamacare risk-adjustment program, from making further collections or payments, including those for the 2017 benefit year, until the litigation is resolved, the agency said.

The Trump administration is halting billions of dollars in payments required under the ACA, citing a district court decision in New Mexico from earlier this year.

Risk adjustment is a key aspect of market stabilization under the ACA, also known as Obamacare.

In a separate statement, the CMS said it was "disappointed" by the court's ruling, adding that "billions of dollars in risk adjustment payments and collections are now on hold".

At stake are billions in payments to insurers with sicker customers.

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

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President Donald Trump's administration has used its regulatory powers to undermine Obamacare after the Republican-controlled Congress past year failed to repeal and replace the law.

"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.

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. Through the program, roughly 20 million Americans have received health care coverage.

The administration argued in its announcement that its hands were tied by conflicting court rulings in New Mexico and MA.

The move by CMS may affect publicly traded insurers that have stuck with Obamacare, such as St. Louis-based Centene Corp.

"I think insurers are going to be watching very closely what the administration says in court, and whether this is a sign of further steps to undermine the law, or a good faith effort to try to comply with the judge's order", he says. The fund would be separate from the federal risk adjustment payments and could allow the insurers to reduce their requested rate increases by as much as 30 percent.

These moves are prompting some insurers to request premium hikes for 2019 in the double digits. Eventually, experts say, some insurers could simply get fed up and exit ObamaCare markets, leading to fewer choices for consumers.

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