Health care premiums may go up
Insurers slam decision to freeze payments.
The Trump administration’s decision to freeze billions in payments to health insurers with plans under Obamacare that cover a higher number of sicker patients could cause health care premiums to rise in 2019.
In the latest swipe at the Affordable Care Act, which President Donald Trump was unable to repeal in his first year in office, the Centers for Medicare & Medicaid Services has said it is putting “on hold” its “risk adjustment” program.
The program collects money from insurers with fewer high-cost plan members and transfers the funds to insurers with more high-need patients that require more expensive care.
The CMS said a February federal court decision in New Mexico, which ruled it was using a flawed formula to determine its collections and payments amounts, prevented it from continuing the program. The CMS, which noted that a federal court in Massachusetts found its formula fair, has asked the New Mexico court to reconsider its decision and said it is seeking a quick resolution to the legal issue.
In the meantime, some health insurers are potentially out billions of dollars. The CMS said it wouldn’t make transfer payments for the 2017 benefit year totaling $10.4 billion.
The risk-adjustment program, which does not cost taxpayers any money and is required by law, is designed to ensure that health care coverage is available for sicker, higher-cost patients by sharing the cost of covering them.
Insurers criticized the payment freeze, arguing it harms consumers and will cause turmoil for the insurance industry as they move to finalize their 2019 rates.
“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. “It will undermine Americans’ access to affordable coverage, particularly for those who need medical care the most.”
In a separate statement, the CMS said it was “disappointed” by the court’s ruling, adding that “billions of dollars in risk adjustment payments and collections are now on hold.”
America’s Health Insurance Plans (AHIP), a national association representing health insurers, said in a statement that it was “discouraged by the new market disruption.”