The Trump administration announced Saturday evening that it is temporarily freezing billions of dollars of payments to health insurance companies intended to help them manage higher-risk patients, sparking backlash from the industry’s lobbying arm as insurers continue to struggle to adjust to the administration’s repeated attacks on Obamacare.
The federal government provides Obamacare insurers risk adjustment payments, which are supposed to cushion insurers from taking steep loses on high risk patients in the Obamacare marketplace. The government paid out over $10 billion in these in 2017.
Centers for Medicare and Medicaid Service announced the abrupt halt of these payments Saturday evening, citing a February 2018 ruling from the U.S. District Court for the District of New Mexico that invalidates them.
“We were disappointed by the court’s recent ruling,” CMS Administrator Seema Verma saidin a statement. “As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold. 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.”
The insurance industry is already speaking out against the administration’s decision, calling it a crucial blow during a time when insurance companies are trying to come up with premiums and packages for 2019.
“We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments. This decision comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates,” trade group America’s Health Insurance Plans (AHIP) said in a statement Saturday. “We encourage the Administration to reevaluate its decision and work with all stakeholders to make health care more affordable for all Americans..”
Insurers themselves are voicing concerns for market destabilization following the announcement.
“This action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices,” Blue Cross Blue Shield Association President and CEO Scott Serota said in a statement. “It will undermine Americans’ access to affordable coverage, particularly those who need medical care the most.”
Over the course of his first 18 months in office, the president has slowly targeted Obamacare with a series of moves intended to undermine the system and disrupt the marketplace.
The president has rolled back funding for a program intended to help individuals navigate the insurance marketplace, Obamacare’s navigator program, signed an executive order to allow for groups to purchase insurance across state lines, stopped federal funding for Obamacare subsidies, pushed for consumer access to more affordable short-term, limited duration health insurance plans, cut Obamacare’s open enrollment period in half and its advertising budget 90 percent.
Trump made repealing and replacing Obamacare a key part of his successful bid for the presidency in 2016, but he has, thus far, been unable to materialize that goal.
House Republicans passed a bill — the American Health Care Act — in May 2017 after a few months of rocky negotiations that nearly stopped the effort in its track.
Senate Republicans had a more difficult time, given their 52- and subsequently slim 51-seat majority in the upper chamber. The Senate tried roughly a handful of times in 2017 to repeal and replace Obamacare, offering up a “skinny repeal” in July 2017 with no replacement as a last-ditch effort to overhaul the American health care system. That, too, failed to pass muster within the entirety of either the Republican or Democratic conferences.
Ultimately, Republicans and the White House have moved on from repealing and replacing Obamacare, although a coalition of outside conservative groups have hopes of reviving the debate in the Senate.
Senate Majority Leader Mitch McConnell has made it clear he is ready to move on from the issue, but he has said he would entertain a proposal that was guaranteed to get enough votes to pass.