Trump Administration Freezes Payments Required By The Affordable Care Act

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The risk-adjustment payments - from insurance companies with a majority of healthy clients to those companies insuring people with chronic illnesses - were written into the Affordable Care Act (ACA) as a way to stabilize the system.

The Trump administration's decision Tuesday to slash funding to nonprofit groups that help Americans buy individual health insurance coverage sparked outrage from advocates of the Affordable Care Act.

The risk adjustment program plays an important role in the ACA by pooling risk for insurers, transferring funds from insurers who enroll healthier members for relatively less, to those that take on higher costs in order to enroll sicker members.

The U.S. agency that administers Obamacare is freezing payments to insurers that cover sicker patients, saying a federal court ruling ties its hands. No longer were insurers allowed to deny coverage or charge higher premiums for patients who suffered from costly preexisting conditions.

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In February, however, the federal district judge in New Mexico issued a decision voiding the formula used in calculating risk adjustment payments for the 2014-2018 benefit years.

"This is how health care disparities are exacerbated - we will be put in the terrible position of pitting populations that need assistance against each other in order to prioritize how we can use the resources", she said.

"It has caused insurer collapses and market exits that reduced competition".

In its announcement, CMS said the private sector is more cost-effective, so people looking for health coverage should be encouraged to go to insurance agents and brokers (who may receive a commission, unlike navigators).

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"We urge the Trump administration to back off of this risky and destabilizing plan, and instead begin working on bipartisan solutions to make coverage more affordable", said Brad Woodhouse, the executive director of Protect Our Care, a progressive group that supports Obamacare.

The administration is taking legal steps to challenge the ruling in New Mexico, says Levitt. The announcement comes in the midst of the annual rate-filing period when insurers announce their estimated premium prices and plans for coverage to state regulators. In 2016, funding for navigator groups was $63 million, so the most recent funding cut represents an 80% reduction from two years ago.

These "association health plans" are just one more facet of Trump's Obamacare sabotage, cheap plans with limited coverage meant to draw healthy people out of the Obamacare markets.

The bottom line is that the Trump administration is making good on its promise to rid Americans of Obamacare, with or without the help of the legislature. The counselors, known as navigators, help consumers find an affordable health plan on the ACA exchanges. But here too the insurers have threatened higher premiums, even as the insurers pocket tax-credit subsidies that increase with premiums.

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CMS now wants the navigators to promote these policies in addition to steering people toward ACA-compliant plans and Medicaid.