Published: Wed, July 11, 2018
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Trump slashes funding that helps people sign up for Obamacare

Trump slashes funding that helps people sign up for Obamacare

"CMS 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".

Risk adjustment is an important part of the ACA. 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 Affordable Care Act's (ACA) "risk adjustment" program is meant to incentivize health insurers to cover individuals with pre-existing and chronic conditions by collecting money from insurers with relatively healthy enrollees to offset the costs of other insurers with sicker ones. Earlier this year, the Trump administration proposed to expand short-term junk plans, which are not required to cover people with pre-existing conditions.

"It has caused insurer collapses and market exits that reduced competition". The move brought a sharp response from health insurers warning of market disruptions and higher costs. But a month later a federal judge in New Mexico said it was.


New Mexico Health Connections and Minuteman Health of MA, two small nonprofit insurers, filed lawsuits in 2016, contending that the Obama administration created an inaccurate formula that unfairly rewarded large insurers. Almost half of us living in North Dakota have a pre-existing condition and could be found "left out in the cold" without insurance. "That will increase competition, and competition will help keep prices down".

"Any action to stop disbursements under the risk adjustment program will significantly increase 2019 premiums for millions of individuals and small-business owners, and could result in far fewer health plan choices", said Justine G. Handelman, a senior vice president of the Blue Cross and Blue Shield Association. It added that the move comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates.

The Trump administration on Monday announced another nail in the coffin of Obamacare, declaring it would withhold the payment of risk-adjusted premiums to insurers. "It will undermine Americans' access to affordable coverage, particularly those who need medical care the most". On the same day, Minuteman Health, Inc. filed a similar complaint in district court in MA. The CMS has appealed the decision, particularly because a MA court upheld such payments.

CMS was referring to a February ruling from a federal court in New Mexico that invalidated the risk adjustment formula, and a January ruling from a federal court in MA that upheld it.

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