United States freezes payments to ACA insurers with sicker patients

Health insurers warned that a move by the Trump administration on Saturday to temporarily suspend a program that was set to pay out $10.4 billion to insurers for covering high-risk individuals past year could drive up premium costs and create marketplace uncertainty.

CMS cites the late February court ruling in deciding to place a freeze on the $10.4 billion which it collected a year ago, and which ordinarily would be dispersed among high-risk insurers.

Under the risk adjustment program, insurers with healthier patients pay those with sicker patients. "It will undermine Americans' access to affordable coverage, particularly those who need medical care the most".

Risk adjustment is an important part of the ACA. Small insurers often complain about risk adjustment payments because they end up paying their larger competitors, who tend to have the sickest patients. The CMS has appealed the decision, particularly because a MA court upheld such payments.

Trump tweeted dozens and dozens of times about Obamacare and its demise previous year as he pushed the Senate to repeal the law.

"So much uncertainty put in the market at this point of time is very unnerving", said Ritu Agarwal, senior associate dean of research at the University of Maryland Robert H. Smith School of Business, who follows the health care system.

"We were disappointed by the court's recent ruling", said CMS Administrator Seema Verma. Many agree-Democrats and Republicans-that a person with a pre-existing condition needs health insurance coverage and should not be denied on that fact. "It will allow more companies to get into the insurance market". In a March 2018 ruling out of New Mexico, US District Court Judge Thomas Browning that the methodology used by the federal government was "arbitrary and capricious" and remanded it back to the agency, according to Lexis Legal News.

Martin Hickey, the founder of New Mexico Health Connections, the state's health care co-op and the company that filed the lawsuit, believes the court ruling will reduce the prices and benefit consumers.

State officials, with bipartisan support from both Gov. Larry Hogan and the General Assembly, asked the federal agency this spring for permission to establish a reinsurance program that would create a $462 million fund for insurers to cover the most expensive claims.

Insurers are pressing the administration to resolve the issue and resume the payments, arguing that premiums will rise for ObamaCare enrollees if funding is cut off. These include eliminating the individual mandate penalty and broadening the availability of two alternatives to Affordable Care Act policies.

"It has caused insurer collapses and market exits that reduced competition".

(Copyright © 2015. All Rights Reserved.)
 
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