The Slatest

Health Insurers Warn of “Market Disruption” After Trump Suspends Obamacare Payments

Peter Yanez, who is insured under a policy from the Affordable Care Act, has his blood pressure measured by Linda Williams, a medical assistant, before getting a blood test at a Planned Parenthood health center on May 12, 2017 in Miami, Florida.
Peter Yanez, who is insured under a policy from the Affordable Care Act, has his blood pressure measured by Linda Williams, a medical assistant, before getting a blood test at a Planned Parenthood health center on May 12, 2017 in Miami, Florida.
Joe Raedle/Getty Images

The Trump administration appears to once again be making it more difficult for Obamacare to keep operating as intended. In a move that insurers say could create uncertainty and increase premiums, the administration temporarily put a program on hold that pays billions to help cover high-risk individuals. Many insurers depend on what’s known as “risk adjustment” payments that are meant to stabilize insurance markets and reduce incentives for insurers to only seek out healthy customers. On Saturday, the U.S. Centers for Medicare & Medicaid Services said it would suspend payments, worth around $10.4 billion in 2017, due to months-old conflicting court rulings about the formula used to calculate the payments.

The move “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,” America’s Health Insurance Plans, a trade group, said in a statement. Justine G. Handelman, a senior vice president of the Blue Cross and Blue Shield Association, agreed, saying that stopping the payments “will significantly increase 2019 premiums” as well as “undermine Americans’ access to affordable care, particularly for those who need medical care the most.”

Even as the Trump administration blamed the courts for its decisions, supporters of the Affordable Care Act say this is only the latest effort by the Trump administration to undermine what is normally known as Obamacare. “The Trump administration just keeps pushing their destructive repeal-and-sabotage agenda, no matter the cost to the American people,” said Brad Woodhouse, the director of Protect Our Care, an advocacy group that supports the health law. “Following through with this latest act of sabotage could raise rates for all consumers even more.”

After all, this kind of action is hardly new and only marks the latest instance of the Trump administration using regulation to undermine the Affordable Care Act after congress failed to repeal and replace the law as the president had vowed to do on the campaign trail. Although there were rumors that the Trump administration was going to stop the payments the fact that such an important move was announced via email on a Saturday raised more than a few eyebrows. One of the reasons why the timing of the decision is suspect is that it comes at a time when insurers are deciding which markets to participate in for next year.