Trump administration deals another potential blow to Obamacare

To do that, the government collects money from health insurers with enrollees who were healthier and as a result "cost less to insure".

Yet insurers say Congress' decision to gut the "individual mandate" to hold insurance - the main prod for getting healthy people to sign up - forced them to request higher-than-usual rates for 2019. "It moves us back to some extent to the status quo where people with pre-existing conditions found it very hard to get insurance".

"The decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own", the group said.

The announcement came as insurers were awaiting an annual report that usually comes at the end of June, informing them of whether they owe money into the risk adjustment program or will be paid out for the previous year. "And costs for taxpayers will rise as the federal government spends more on premium subsidies".

The Affordable Care Act's (ACA) "risk adjustment" program is meant to incentivize health insurers to cover individuals with pre-existing and chronic conditions by collecting money from insurers with relatively healthy enrollees to offset the costs of other insurers with sicker ones, according to Reuters. The suit brought forward in New Mexico argued that the current formula potentially favors larger insurance companies.

"As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", CMS Administrator Seema Verma said in the agency's statement. "It will undermine Americans' access to affordable coverage, particularly those who need medical care the most". "It enables the country to move away from a market where plans compete to avoid covering or charge more to people with preexisting health conditions, to one where competition is based on quality, affordable care for everyone".

On Feb. 28, 2018, a federal judge in New Mexico decided that the use of the statewide average premium formula to calculate risk adjustment payments was flawed.

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

Health insurers say it is a move that could drive up premium costs and create marketplace uncertainty.

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

The bottom line is that the Trump administration is making good on its promise to rid Americans of Obamacare, with or without the help of the legislature. The left is complaining that HHS halted the payments too casually, but on all the evidence the Trump Administration is trying to abide by the ruling while the courts resolve the dispute.

These moves are prompting some insurers to request premium hikes for 2019 in the double digits.

(Copyright © 2015. All Rights Reserved.)
 
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