Trump Administration Halts Billions in Obamacare Payments as Insurers Warn of Possible Rising Premiums

The Trump administration has announced on Saturday, July 7, the suspension of billions of dollars' worth payments due to insurers, due to a February court ruling that tossed out the formula for the calculations. Insurance groups now warn of possible insurance market instability that could drive up premiums later this year.

As part of the Affordable Care Act, also known as Obamacare, insurers get government-subsidized "risk adjustment" payments that were designed to work as an incentive for them to take in people who are unhealthy or with pre-existing conditions.

Without these payments, many insurers would often stick to taking in healthy consumers and would pass over those who are already ill or are already at risk, health-wise, as the New York Times pointed out.

The Trump administration has decided to suspend the "risk adjustment program" section of Obamacare, saying that a ruling from a Federal District Court in New Mexico has tossed out the formula used in calculating payments, in response to a lawsuit.

As a result, around $10.4 billion in "risk adjustment" payments due to insurers for the 2017 benefit year has been frozen, according to the Wall Street Journal via Market Watch.

It was not a decision that the Trump cabinet openly sided with. "We were disappointed by the court's recent ruling," said Seema Verma, the administrator of the Centers for Medicare and Medicaid Services. Even then, Obamacare supporters saw the suspension as an effort to undermine the ACA.

As the debate rages on, insurers are more concerned with next year's insurance market, which is now in danger of destabilizing from the suspension.

"Any action to stop disbursements under the risk adjustment program will significantly increase 2019 premiums for millions of individuals and small-business owners, and could result in far fewer health plan choices," Justine G. Handelman, a senior vice president of the Blue Cross and Blue Shield Association, warned.

"It will undermine Americans' access to affordable care, particularly for those who need medical care the most," he added.

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