Trump officials cut funding for ObamaCare outreach groups

Trump administration freezes Obamacare payments, citing court decision

The Trump administration is halting billions of dollars in payments required under the ACA, citing a district court decision in New Mexico from earlier this year. The program transfers funding from plans with lower-risk enrollees to higher-risk ones in an effort to even out the market and "encourage insurers to compete based on the value and efficiency of their plans rather than by attracting healthier enrollees", according to the Kaiser Family Foundation.

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.

In January this year, the federal district judge in MA upheld the methodology used by the federal government to calculate risk adjustment payments.

For the past five years, when insurance has been available through ACA marketplaces for people who do not have access to affordable health benefits through a job, federal health officials have started every spring working with navigator groups on plans for the coming enrollment season.

"We were disappointed by the court's recent ruling", CMS Administrator Seema Verma said in the agency's statement.

The New Mexico ruling found fault with the formula used by the government to calculate the payments, saying it was "arbitrary and capricious".

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While imperfect, the risk adjustment program "has helped promote market stability over the past five years", Wehrle said. The Maryland Insurance Administration has a hearing scheduled for July 31. "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".

America's Health Insurance Plans (AHIP), the trade organization representing health insurers, decried the suspension of the payments.

President Donald Trump's administration has used its regulatory powers to undermine Obamacare after the Republican-controlled Congress previous year failed to repeal and replace the law.

Risk adjustment is a key aspect of market stabilization under the ACA, also known as Obamacare.

Insurance Commissioner Al Redmer Jr. said that as of now he doesn't expect the latest decision to interrupt the state's rate-setting process. The Trump administration is making it easier for Americans to sign up for these policies, which many experts say will weaken Obamacare by siphoning off younger and healthier enrollees.

"We have to be very cautious. There is a need to analyze insurers case-by-case and account for their competitive landscapes", said Tinglong Dai, an associate professor of operations management and business analytics at the Johns Hopkins University Carey Business School. "Cutting such payments achieves the opposite effect".

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