Swordsmyth
07-07-2018, 07:51 PM
The Trump administration is freezing a critical Affordable Care Act (ACA) insurance payment program that discourages insurers from cherry picking healthier enrollees by compensating them for sicker ones.
The move could rattle insurance companies at the very moment when they’re deciding whether to continue selling ACA plans and setting premiums for 2019. It’s not immediately clear what this means for ACA enrollees, if anything.
The news comes after (https://www.wsj.com/articles/trump-administration-expected-to-suspend-aca-program-related-to-insurer-payments-1530930606)the Wall Street Journal reported they might suspend the program:
The suspension of some payouts under the program, known as risk adjustment, could come in the wake of a recent decision by a federal judge in New Mexico, who ruled that part of its implementation was flawed and hadn’t been adequately justified by federal regulators, people familiar with the plans said.
“We were disappointed by the court’s recent ruling. As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold,” said the Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma in a statement released (https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-07-07.html) on Saturday. “CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets.”
CMS argues the ruling prevents it from making further collections or payments in the risk adjustment program, including amounts for the 2017 benefit year which amount to $10.4 billion, until the litigation is resolved.
Ending the risk adjustment program or temporarily freezing payments could unnerve insurers who thought they were in for a relatively calm ACA season. CMS added in its statement that it will issue guidance shortly on how insurers should treat the news, in terms of financial losses.
Georgetown health policy expert Edwin Park said (https://twitter.com/EdwinCPark/status/1015612549725745152) should the risk adjustment program end, insurers over the long run “would be forced to sharply raise premiums or reconsider participation.”
More at: https://thinkprogress.org/trump-might-end-obamacare-payment-program-rattling-insurers-ahead-of-key-market-decisions-0ae9d3c61c52/
The move could rattle insurance companies at the very moment when they’re deciding whether to continue selling ACA plans and setting premiums for 2019. It’s not immediately clear what this means for ACA enrollees, if anything.
The news comes after (https://www.wsj.com/articles/trump-administration-expected-to-suspend-aca-program-related-to-insurer-payments-1530930606)the Wall Street Journal reported they might suspend the program:
The suspension of some payouts under the program, known as risk adjustment, could come in the wake of a recent decision by a federal judge in New Mexico, who ruled that part of its implementation was flawed and hadn’t been adequately justified by federal regulators, people familiar with the plans said.
“We were disappointed by the court’s recent ruling. As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold,” said the Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma in a statement released (https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-07-07.html) on Saturday. “CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets.”
CMS argues the ruling prevents it from making further collections or payments in the risk adjustment program, including amounts for the 2017 benefit year which amount to $10.4 billion, until the litigation is resolved.
Ending the risk adjustment program or temporarily freezing payments could unnerve insurers who thought they were in for a relatively calm ACA season. CMS added in its statement that it will issue guidance shortly on how insurers should treat the news, in terms of financial losses.
Georgetown health policy expert Edwin Park said (https://twitter.com/EdwinCPark/status/1015612549725745152) should the risk adjustment program end, insurers over the long run “would be forced to sharply raise premiums or reconsider participation.”
More at: https://thinkprogress.org/trump-might-end-obamacare-payment-program-rattling-insurers-ahead-of-key-market-decisions-0ae9d3c61c52/