[{"innerBlocks":[],"name":"core\/freeform","postId":1964,"blockType":{"name":"core\/freeform","keywords":[],"attributes":{"content":{"type":"string","source":"raw"},"lock":{"type":"object"}},"providesContext":[],"usesContext":[],"selectors":[],"supports":{"className":false,"customClassName":false,"reusable":false},"styles":[],"variations":[],"apiVersion":3,"title":"Classic","description":"Use the classic WordPress editor.","category":"text"},"originalContent":"(Bloomberg)\u2014Affordable Care Act insurers are facing a fresh round of uncertainty that could drive up premiums or push companies to stop offering coverage through the law, after the Trump administration\u2019s latest move to cut off subsidies meant to help stabilize insurance markets.

On Saturday, the Centers for Medicare and Medicaid Services said a months-old federal court ruling would force it to suspend what are known as risk-adjustment payments, worth about $10.4 billion for 2017. The payments are part of a program in the Affordable Care Act meant to help balance the insurance markets when some insurers inevitably got stuck with sicker, more costly patients.

The administration said it\u2019s appealing the ruling, which most immediately affects payments under the program in 2017 that were to be made this year.

\u201cBillions of dollars in risk-adjustment payments and collections are now on hold,\u201d CMS Administrator Seema Verma said in a statement over the weekend. \u201cCMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets.\u201d

The effect of the cutoff will be complex. In the short-term, it will likely favor health insurers that have drawn healthier, less costly customers. Under the risk-adjustment program, those insurers make payments into a pool is redistributed to plans with sicker, more costly patients. As a result, some plans that had already been doing better financially will benefit from not having to make the payments.

Likewise, plans with more costly groups of customers will suffer. Without the steadying mechanism, that could destabilize the markets in the long term. It will also force insurers to raise premiums for next year, to cover the risk that the stabilizing payments won\u2019t get made, said one lobbying group for health insurers.

\u201cThis action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices,\u201d Blue Cross Blue Shield Association Chief Executive Officer Scott Serota said in a statement. The Centers for Medicare and Medicaid Services \u201cshould take immediate action to reinstate these payment transfers to ensure the market works as intended.\u201d

The program doesn\u2019t cost the federal government money. Instead, it moves funds around among insurers to make sure that even people with pre-existing conditions or who are at higher risk of getting sick can get coverage.

The move comes just as health insurers were deciding which markets to participate in for next year and going about the complex process of setting the prices they\u2019ll charge. Despite the Trump administration\u2019s prior attempts to dismantle the law or undermine it, some insurers that have stuck with the program have turned profits, and there have been early signs that some health plans would expand their coverage footprints for next year.

Publicly traded insurers with large presences in Obamacare include Centene Corp. and Molina Healthcare Inc. Suspending the program could theoretically benefit those companies, which each owed other insurers about $1 billion under the program as of March 31, according to regulatory filings. Company representatives didn\u2019t comment outside normal business hours.

Some newer insurers have criticized the risk-adjustment program, saying it benefits more established insurers that have the resources to identify more of their customers\u2019 ailments. The lawsuit that led CMS to halt payments resulted from a challenge by an insurer in New Mexico that said the program\u2019s rules were arbitrary and unfair.

The court decision was \u201cgood for small and new health insurance companies, and therefore to anyone who purchases health insurance,\u201d said doctor Martin Hickey, the founder and former CEO of that insurer, New Mexico Health Connections. \u201cGetting this program fixed will lead to a more stable market. It will attract more insurance companies because the risk adjustment will be more predictable and this increased competition will reduce rates.\u201d

Insurers that face the most risk of harm are likely smaller companies with lots of sick customers. Those companies would tend to be owed money and might not have the financial resources to wait for a resolution, or to make up for a shortfall.

\u201cThis decision will have serious consequences for millions of consumers,\u201d the trade group America\u2019s Health Insurance Plans said in a statement. \u201cIt 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.\u201d

The Centers for Medicare and Medicaid Services said it will prove more information soon on how insurers should handle other issues tied to risk-adjustment payments. The agency typically would give insurers information about their 2017 payments in June 2018, and then move the funds in the fall.

The Trump administration could resolve the situation by issuing a new rule for the risk-adjustment program that addresses issues raised by the judge\u2019s ruling in the New Mexico case, according to Katie Keith, who consults on health-care issues and blogs for the journal Health Affairs.

The legal situation won\u2019t affect the risk-adjustment program in 2019, because the administration already issued a new regulation for next year that accounts for the issues in the New Mexico case, Keith wrote.

The Centers for Medicare and Medicaid Services didn\u2019t immediately respond to a question Sunday about writing a new rule to cover the current payments.","saveContent":"(Bloomberg)\u2014Affordable Care Act insurers are facing a fresh round of uncertainty that could drive up premiums or push companies to stop offering coverage through the law, after the Trump administration\u2019s latest move to cut off subsidies meant to help stabilize insurance markets.

On Saturday, the Centers for Medicare and Medicaid Services said a months-old federal court ruling would force it to suspend what are known as risk-adjustment payments, worth about $10.4 billion for 2017. The payments are part of a program in the Affordable Care Act meant to help balance the insurance markets when some insurers inevitably got stuck with sicker, more costly patients.

The administration said it\u2019s appealing the ruling, which most immediately affects payments under the program in 2017 that were to be made this year.

\u201cBillions of dollars in risk-adjustment payments and collections are now on hold,\u201d CMS Administrator Seema Verma said in a statement over the weekend. \u201cCMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets.\u201d

The effect of the cutoff will be complex. In the short-term, it will likely favor health insurers that have drawn healthier, less costly customers. Under the risk-adjustment program, those insurers make payments into a pool is redistributed to plans with sicker, more costly patients. As a result, some plans that had already been doing better financially will benefit from not having to make the payments.

Likewise, plans with more costly groups of customers will suffer. Without the steadying mechanism, that could destabilize the markets in the long term. It will also force insurers to raise premiums for next year, to cover the risk that the stabilizing payments won\u2019t get made, said one lobbying group for health insurers.

\u201cThis action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices,\u201d Blue Cross Blue Shield Association Chief Executive Officer Scott Serota said in a statement. The Centers for Medicare and Medicaid Services \u201cshould take immediate action to reinstate these payment transfers to ensure the market works as intended.\u201d

The program doesn\u2019t cost the federal government money. Instead, it moves funds around among insurers to make sure that even people with pre-existing conditions or who are at higher risk of getting sick can get coverage.

The move comes just as health insurers were deciding which markets to participate in for next year and going about the complex process of setting the prices they\u2019ll charge. Despite the Trump administration\u2019s prior attempts to dismantle the law or undermine it, some insurers that have stuck with the program have turned profits, and there have been early signs that some health plans would expand their coverage footprints for next year.

Publicly traded insurers with large presences in Obamacare include Centene Corp. and Molina Healthcare Inc. Suspending the program could theoretically benefit those companies, which each owed other insurers about $1 billion under the program as of March 31, according to regulatory filings. Company representatives didn\u2019t comment outside normal business hours.

Some newer insurers have criticized the risk-adjustment program, saying it benefits more established insurers that have the resources to identify more of their customers\u2019 ailments. The lawsuit that led CMS to halt payments resulted from a challenge by an insurer in New Mexico that said the program\u2019s rules were arbitrary and unfair.

The court decision was \u201cgood for small and new health insurance companies, and therefore to anyone who purchases health insurance,\u201d said doctor Martin Hickey, the founder and former CEO of that insurer, New Mexico Health Connections. \u201cGetting this program fixed will lead to a more stable market. It will attract more insurance companies because the risk adjustment will be more predictable and this increased competition will reduce rates.\u201d

Insurers that face the most risk of harm are likely smaller companies with lots of sick customers. Those companies would tend to be owed money and might not have the financial resources to wait for a resolution, or to make up for a shortfall.

\u201cThis decision will have serious consequences for millions of consumers,\u201d the trade group America\u2019s Health Insurance Plans said in a statement. \u201cIt 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.\u201d

The Centers for Medicare and Medicaid Services said it will prove more information soon on how insurers should handle other issues tied to risk-adjustment payments. The agency typically would give insurers information about their 2017 payments in June 2018, and then move the funds in the fall.

The Trump administration could resolve the situation by issuing a new rule for the risk-adjustment program that addresses issues raised by the judge\u2019s ruling in the New Mexico case, according to Katie Keith, who consults on health-care issues and blogs for the journal Health Affairs.

The legal situation won\u2019t affect the risk-adjustment program in 2019, because the administration already issued a new regulation for next year that accounts for the issues in the New Mexico case, Keith wrote.

The Centers for Medicare and Medicaid Services didn\u2019t immediately respond to a question Sunday about writing a new rule to cover the current payments.","order":0,"get_parent":{},"attributes":[],"attributesType":{"content":{"type":"string","source":"raw"},"lock":{"type":"object"}},"dynamicContent":""}]

U.S. freezes payments to ACA insurers with sicker patients

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