Administration Freezes Program That Pays Billions To Insurers To Help Stabilize Health Law Marketplaces

The New York Times: Health Insurers Warn Of Market Turmoil As Trump Suspends Billions In Payments
The Trump administration said Saturday that it was suspending a program that pays billions of dollars to insurers to stabilize health insurance markets under the Affordable Care Act, a freeze that could increase uncertainty in the markets and drive up premiums this fall. Many insurers that enroll large numbers of unhealthy people depend on the “risk adjustment” payments, which are intended to reduce the incentives for insurers to seek out healthy consumers and shun those with chronic illnesses and other pre-existing conditions. (Pear, 7/7)

The Associated Press: Trump Administration Takes Another Swipe At 'Obamacare'
In a weekend announcement, the Centers for Medicare and Medicaid Services said the administration is acting because of conflicting court ruling in lawsuits filed by some smaller insurers who question whether they are being fairly treated under the program. The so-called "risk adjustment" program takes payments from insurers with healthier customers and redistributes that money to companies with sicker enrollees. Payments for 2017 are $10.4 billion. No taxpayer subsidies are involved. (7/8)

The Wall Street Journal: Trump’s Latest Affordable Care Act Move Adds To Insurers’ Uncertainty
CMS officials didn’t specify how long the suspension would last or what would trigger a resumption of payments in the program. CMS officials said they are looking for a quick resolution to the legal issues raised. “We’re now in the midst of the 2019 rate-filing process and it’s not clear how the risk-adjustment program will be operating,” said Cori Uccello, senior health fellow at the American Academy of Actuaries. (7/8)

Reuters: Insurers Warn Of Rising Premiums After Trump Axes Obamacare Payments Again
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. "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. And costs for taxpayers will rise as the federal government spends more on premium subsidies," AHIP said in a statement. (7/8)

Politico: Trump Administration Freezes Billions In Obamacare Payments, Outraging Advocates
Blue Cross Blue Shield Association President and CEO Scott Serota said the administration has the legal justification needed to move forward with the payments regardless of the New Mexico ruling. “This action will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices,” Serota said in a statement. “It will undermine Americans’ access to affordable coverage, particularly those who need medical care the most.” (7/8)

The Washington Post: Trump Administration Takes Another Major Swipe At The Affordable Care Act
Risk adjustment is one of three methods built into the 2010 health-care law to help insulate insurance companies from the ACA requirement that they accept all customers for the first time — healthy and sick — without charging more to those who need substantial care. The other two methods were temporary, but risk adjustment is permanent. Federal health officials are required each year to calculate which insurers with relatively low-cost consumers must chip in to a fund, and which ones with more expensive customers are owed money. This idea of pooling risk has had significant practical effects: encouraging insurers to participate in the insurance marketplaces the ACA created for Americans who cannot get affordable health benefits through a job. (Goldstein, 7/7)

Bloomberg: Trump Health Officials Toss Obamacare Insurers Another Curveball 
The effect of the cut-off 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. (Tracer, Broderick and Kopit, 7/7)

Modern Healthcare: Trump Administration Freezes Risk Adjustment Payments 
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. One reason could be that newer insurers have limited information on their members' health status and claims history. Legacy insurers that have a wealth of patient data may have a leg up on coding. Small health plans also have far less capital than more established insurers to comfortably make large risk-adjustment payments. (7/8)

In other health law news —

San Francisco Chronicle: Affordable Care Act’s Unexpected Side Effect: An IOU To The IRS
It is unclear how many Americans are paying back some or all of the financial assistance they received to buy health insurance because their income turned out to be higher than they projected. The most recent analysis of the issue was done in 2015 by H&R Block, which found that 52 percent of people who enrolled in health insurance through Affordable Care Act marketplaces around the country ended up paying back some of the subsidies. (Ho, 7/8)

Georgia Health News: Insurers Seek Modestly Higher Premiums For 2019 Georgia Exchange
Premium increases of 2 percent to almost 15 percent would seem like bad news for Georgians needing health care coverage. But the rate hikes proposed by insurers for Georgia’s 2019 insurance exchange appear almost as a relief, compared with huge rate hikes a year ago — more than 50 percent. (Miller, 7/6)