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The Trump administration announced Saturday another blow to the Affordable Care Act – the freezing of risk adjustment payments that help stabilize insurance pools in the market.
The news comes as a result of a decision of a US District Court Judge in New Mexico, who says the payment program Center for Medicare and Medicaid Services (CMS ) is legally flawed. The lawsuit filed in New Mexico argued that the current formula potentially favors large insurance companies. Now the government is making its decision to suspend payments because the dispute has not been resolved yet.
The CMS makes risk adjustment payments to insurers to encourage them to participate in the market and offset the costs of registering more expensive – high risk – people in insurance pools .
AP "We were disappointed by the recent court decision, and as a result of this litigation, billions of dollars in risk adjustment and recovery payments are now suspended." CMS asked the court to reconsider its decision, and Hope a quick resolution that allows CMS to avoid more negative impacts on Americans who receive their insurance in individual and small group markets, "said CMS administrator Seema Verma.
According to the CMS, the New Mexico court decision prohibits "CMS to collect or make payments according to the current methodology, which uses the average premium on the scale of $ 50,000. ;State".
The decision could be a big financial blow for some insurers and could lead to higher insurance rates in some cases, critics say.
Critics of the position of the administration on the ACA, as Andy Slavitt, former acting administrator of CMS under Barack Obama, said that this measure will cause chaos in the market of the company. 39; insurance. New Mexico's decision alone is not enough to freeze payments, unless, he says, it is a "politically motivated" decision to further disrupt ACA.
The effect of this would be higher premiums and fewer insurers if unresolved.
The Administration says in its release that it was not a quick resolution.
– Andy Slavitt (@ASlavitt) July 7, 2018
President Donald Trump has repeatedly spoken of trying to end the ACA, familiarly known as Obamacare, since the Announcement of his campaign. Trump tweeted dozens and dozens of times about Obamacare and his disappearance last year while he was pushing the Senate to repeal the law. He repeated the "abrogate and replace" mantra throughout the election campaign and once in the office, and signed a decree as the first act as president to minimize the "economic burden" of the ACA.
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