Trump administration cuts grants to help people get Obamacare

13 July, 2018, 22:57 | Author: Sherman Richardson
  • Trump administration freezes billions of dollars in payments to Obamacare insurers

Health insurers warn that a move by the Trump administration on Saturday to temporarily suspend a program that was set to pay out $10.4 billion to insurers for covering high-risk individuals previous year could drive up premium costs and create marketplace uncertainty.

The slash in funding represents the latest efforts by the Trump Administration to undermine former President Barack Obama's cornerstone legislative achievement. Close to half get subsidized private coverage that would be affected by Saturday's Trump administration announcement. "It enables the country to move away from a market where plans compete to avoid covering or charge more to people with preexisting health conditions, to one where competition is based on quality, affordable care for everyone".

The federal Centers for Medicare and Medicaid Services will temporarily freeze payments for the so-called "risk-adjustment" program that takes money from insurers and redistributes it to companies with more expensive patients.

The agency once again defended the decrease by saying that navigators, which usually hail from non-profit and community organizations, are not effective. Back in February, a federal judge partially agreed with the insurer and barred the government from making further collections or payments using its current formula.

Citing two conflicting federal court cases on the use of statewide average premiums in its decision, CMS said it can not collect or redistribute funds for risk-adjusted payments. The government asked the court to reconsider its ruling.

The ambiguity involved in the conflicting New Mexico and MA rulings may mean the suspension of payments will indeed be temporary. Compare that to agents and brokers who enrolled 42 percent of customers at a cost of just $2.42 per enrollee.

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Nonetheless, the timing is problematic. "We're now in the midst of the 2019 rate-filing process and it's not clear how the risk-adjustment program will be operating", said Cori Uccello, senior health fellow at the American Academy of Actuaries. Initial reports of sky-high premium increases have been offset somewhat by more recent reports of moderate increases, according to data from Kaiser Family Foundation. "It is important to keep in mind that the original risk adjustment payments are budget-neutral such that for some insurers to win, other insurers have to lose".

"The program does not cost taxpayers any money and has worked effectively to help balance the cost of caring for those with significant health needs by ensuring that health plans are able to enroll all consumers, regardless of their health status", Serota said in a statement.

Whatever happens with the risk adjustment payments, it looks as if many exchange consumers will be left to figure out their options for 2019 on their own. Until now, the grants have been used only to help people choose and buy ACA health plans or to help steer people with low incomes toward Medicaid.

The Trump administration announced Tuesday it would could nationwide funding for navigators by 72 percent, from $36 million to $10 million.

The Associated Press contributed to this article.

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