The Trump administration announced Saturday it will temporarily suspend an Obamacare program meant to stabilize markets by halting billion of dollars in payouts to insurance companies.
Center for Medicare and Medicaid Services will temporarily suspend so-called “risk-adjustment payments” stemming from 2017 business this fall as well as payments next year that would reflect 2018 business.
The potentially damaging move was made in the wake of a federal judge ruling that the Obama administration's formula for calculating the payments was flawed and inadequately justified by regulators.
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“We were disappointed by the court’s recent ruling,” said CMS administrator Seema Verma. “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 Wall Street Journal first reported the move.
The risk adjustment program was meant to prevent insurers from gaming te system and targeting low-risk customers to keep costs down.
America's Health Insurance Plans, a trade organization representing health insurers, blasted the suspension of the payments.
"We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments," the group said in a statement.
President Trump has repeatedly vowed to dismantle Obamacare and has pushed Republicans in Congress to pass legislation to gut the Affordable Care Act. The President has remained committed to taking apart his predecessor’s cornerstone despite an embarrassing inability to garner enough votes on Capitol Hill.
Trump has succeeded in stripping away the individual mandate that penalized Americans for not having health insurance and has made other moves including ending cost-sharing payments that helped lower-income enrollees pay for coverage. Insurers have indicated that they will have no choice but to hike premiums in 2019.