The government collects the money from health insurers with relatively healthy enrollees, who cost less to insure. Legacy insurers that have a wealth of patient data may have a leg up on coding. The risk-adjustment program has been a source of frustration for small insurers and ACA co-ops that claim the formula makes their membership bases look healthier than they are. About $10.4 billion was slated to be transferred a year ago. The move is the latest effort by the Trump administration to undermine the Affordable Care Act. Citing conflicting federal court decisions on the program, the CMS said it can not collect or disburse funds under the risk-adjustment program.
The payments are meant to help stabilise health insurance markets by compensating insurers that had sicker, more expensive enrollees in 2017.
"Without a quick resolution to this matter, this action will significantly increase 2019 premiums for millions of individuals and small-business owners and could result in far fewer health plan choices", Scott Serota, president and CEO of The Blue Cross Blue Shield Association, said in a statement. He says halting the risk adjustment program will disrupt the individual markets, and might even cause insurers not to participate next year. The CMS has appealed the decision, particularly because a MA court upheld such payments. The court sent the rules back to the Centers for Medicare and Medicaid Services to rework the formula. "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.
"We were disappointed by the court's recent ruling". The Maryland Insurance Administration has a hearing scheduled for July 31. Trump tweeted dozens and dozens of times about Obamacare and its demise past year as he pushed the Senate to repeal the law. Paying off companies that lose money was supposed to be a temporary adjustment to changing markets.
Navigators applying for funding will also be encouraged to show how they will educate people about the newly expanded alternatives to Obamacare, such as association health plans and short-term plans.
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These moves are prompting some insurers to request premium hikes for 2019 in the double digits.
"We have to be very cautious". "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".
America's Health Insurance Plans (AHIP), a trade group representing insurers offering plans via employers, through government programs and in the individual marketplace, said the CMS suspension would create a "new market disruption" at a "critical time" when insurers are setting premiums for next year.