Connect with us

Government

Rising Premiums as Trump Withholds $10.4 Billion From Affordable Care Act

The move doesn’t cost the government or the insurers anything. It costs our money.

Ginny Dang

Published

on

On Saturday, July 7, the Trump administration announced that it was temporarily suspending $10.4 billion in risk adjustment payments for insurers for plan year 2017, citing a ruling in the U.S. District Court of New Mexico.

The ruling was issued in February 2018, with a decision invalidating use of the statewide average premium by the Center for Medicare & Medicaid Services (CMS) in risk adjustment payment calculation for plan years 2014 to 2018. As a result, the Trump administration decided to withhold payments under the program when the formula to calculate the payments was proved to be flawed in the court. Despite this, the U.S. District in Massachusetts upheld CMS from the beginning of 2018.

The risk adjustment program is originally intended to “lessen or eliminate the influence of risk selection on the premiums that plans charge” in health insurance markets under the Affordable Care Act (ACA), so that it encourages insurers to cover people with pre-existing and chronic conditions by pooling risk with other insurers with healthy enrollees.

Trump Administration

Obviously, this program doesn’t cost the federal government money; but since arriving to the White House, Trump has declared war on ACA, especially after the Republican-controlled Congress failed to repeal and replace Obamacare.

Rodney Whitlock, Vice President of Health Policy at ML Strategies and former Republican congressional aide says: “What you have to keep in mind is ultimately the intent of the administration,” where the goal has been to make the marketplace as inhospitable as possible for participating plans.

A statement from the executive director of the pro-ACA group Protect Our Care on Saturday: “The Trump administration just keeps pushing their destructive repeal-and-sabotage agenda, no matter the cost to the American people…Following through with this latest act of sabotage could raise rates for all consumers even more – on top of the rate hikes they have already caused – and is without a doubt an escalation in the Trump administration’s war on people with pre-existing conditions.”

Health Insurance Markets

Insurers say this program put on hold could increase both the premiums and the uncertainty in the markets.

Justine G. Handelman, a senior vice president of the Blue Cross and Blue Shield Association “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,”

“We were disappointed by the court’s recent ruling,” said Seema Verma, the administrator of the Centers for Medicare and Medicaid Services. Her agency has asked the court for another prompt solution for this issue to “prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets.”

Larry Levitt, Senior Vice President at the Kaiser Family Foundation responded to the move: “Insurers hate uncertainty, and when faced with it tend to raise premiums to hedge their bets. When the rules of the game change after the fact – insurers don’t necessarily see the federal government as a particularly reliable partner.” As a result, this move might cause the insurers not to participate next year.

Insurers warn that smaller companies which have lots of enrollees with pre-existing conditions are likely susceptible the most to the risk. On the other side, Dr. Martin E. Hickey, the founder of New Mexico Health Connections, the company that filed the lawsuit, said: “ The risk adjustment formula was extremely biased in favor of large, established insurers and discriminated against new and small insurers, including co-ops like ours. It will allow more companies to get into the insurance market. That will increase competition, and competition will help keep prices down.”

Are you looking for digital journalism training and experience? Are you a journalism major who wants to take your career to the next level? CMN’s Digital Journalism course gives you real-time experience, intense feedback on your writing, exposure to journalism influencers and mentors, and a great place to display your work. You can get academic credit too. Check out the Digital Journalism Course here.

Ginny is a junior Psychology major at Trinity College. She aspires to cultivate the spirit of a journalist and an essayist in her quest to become a writer.

Sign up for the Morning Scoop

and wake up with us each day.

CMN Reports

Government1 week ago

New Year, New Laws for 2019

New year means new laws.

by , The Catholic American University
Equality2 weeks ago

Nancy Pelosi Elected Speaker of the House

Democrats continued to control the House on Thursday by electing Nancy Pelosi who returned to be the first woman to...

by , Mercy College
Government2 weeks ago

The House to Approve Legislation of Reopening of the Government

Late Thursday night, the new Democratic House passed bills that would reopen the government without paying for Trump’s border wall....

by , Mercy College
Government2 weeks ago

Elizabeth Warren Announces She is Running for President in 2020

On New Years Eve, Senator Elizabeth Warren, (D) Massachusetts, announced that she will become a candidate to enter the 2020...

by , Mercy College
Government3 weeks ago

Senator Elizabeth Warren Wants to Create a Public Option for Generic Drugs

The Massachusetts senator wants to take on big pharma.

by , The Catholic American University
Art4 weeks ago

Movie Review: Alfonso Cuarón’s ‘Roma’

The Mexican director's latest reflects the modern state of the human experience.

by , The Catholic American University
Environment4 weeks ago

California Mandates All New Public Transit Buses Go Electric by 2029

The Golden State wants their buses more greener on the roads.

by , The Catholic American University
Government1 month ago

New York Governor Cuomo Pushes for Legalizing Recreational Marijuana in 2019

Today, New York Governor Andrew Cuomo announced that he will be pushing to legalize recreational marijuana in 2019, according to...

by , Mercy College

Top Reads