Insurers say, the timing of the decision could mean higher premiums for millions of individuals and small businesses next year.
Billions of dollars in payments to health insurers under the Obamacare health care law were stopped Saturday by the Trump administration.
The Centers for Medicare and Medicaid Services, which administers programs under the Affordable Care Act, said the action affects $10.4 billion in risk adjustment payments. The government collects the money from health insurers with relatively healthy enrollees, who cost less to insure. CMS says the New Mexico court's ruling bars "CMS from collecting or making payments under the current methodology, which uses the statewide average premium".
CMS plans to appeal the court's ruling, as the U.S. District Court for the District of MA ruled to uphold the payments.
CMS was expected to put out a report at the end of June regarding the payments, but that report has not yet been released.
Insurance companies responded quickly on Saturday with their disapproval.
The trade group America's Health Insurance Plans said in an emailed statement that "We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments". "It will create more market uncertainty and increase premiums for many health plans - putting a heavier burden on small businesses and consumers, and reducing coverage options". About 20 million Americans have received health insurance coverage through the program known as Obamacare.
Other insurers say the administration's action interferes with a program that's working well. "And costs for taxpayers will rise as the federal government spends more on premium subsidies", the group said.
"We are extremely disappointed that the administration has frozen payment transfers under the Affordable Care Act's (ACA) risk adjustment program, which is created to keep costs down for consumers while meeting the medical needs of those requiring significant care", President and CEO Scott Serota said in a statement. "So it seems like an extreme step to halt this program nationally based on a decision by one district court judge".
White House chipping away at the Affordable Care Act; correspondent Peter Doocy looks at the changes being made to the system.
"They can't just say, 'Well, we're new, we don't like what the previous guys did, so we're going to do something different, '" Whitlock says.
The CMS makes risk-adjustment payments to insurers to help encourage them to participate in the marketplace and offset the costs of enrolling more expensive - high risk - people in insurance pools. "Following through with this latest act of sabotage could raise rates for all consumers even more - on top of the rate hikes they have already caused - and is without a doubt an escalation in the Trump administration's war on people with pre-existing conditions".