Report: Trump administration halts billions in Obamacare payments to health insurers

Billions of dollars in payments to health insurers under the Obamacare health care law were stopped Saturday by the Trump administration. The reason? A recent federal court ruling bars distribution of the funds, according to a report by Reuters news.

What is impacted?

The Centers for Medicare and Medicaid Services, which administers programs under the Affordable Care Act, indicated that about $10.4 billion in risk adjustment payments are impacted, according to reports. Through the program, roughly 20 million Americans have received health care coverage.

Reuters’ characterization of the move is that “President Donald Trump’s administration has used its regulatory powers to undermine Obamacare after the Republican-controlled Congress last year failed to repeal and replace the law.”

The New York Times suggested the payment freeze could “increase uncertainty in the markets and drive up premiums this fall.”

The payments in question were intended to offset costs for insurers that had enrollees who were “sicker, more expensive,” Reuters reported. To do that, the government collects money from health insurers with enrollees who were healthier and as a result “cost less to insure.”

“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,” CMS administrator Seema Verma reportedly said in a statement.

In the New York Times’ report, the Blue Cross and Blue Shield Association weighed-in on the issue:

"Any action to stop disbursements under the risk adjustment program will significantly increase 2019 premiums for millions of individuals and small-business owners, and could result in far fewer health plan choices,” said Justine G. Handelman, a senior vice president of the Blue Cross and Blue Shield Association. “It will undermine Americans’ access to affordable care, particularly for those who need medical care the most.”

Why were the payments suspended?

Trump administrators suspended the payments over a February ruling by a federal district court in New Mexico, according to the reports. A judge found that the formula used to calculate the payments is flawed.

The mainstream media report offered more criticism from supporters of the Affordable Care Act.

“The Trump administration just keeps pushing their destructive repeal-and-sabotage agenda, no matter the cost to the American people,” Brad Woodhouse, the director of Protect Our Care, an advocacy group that supports Obamacare, stated in the New York Times report. “Following through with this latest act of sabotage could raise rates for all consumers even more.”