More than two weeks since announcing the suspension of the Affordable Care Act program (aka Obamacare), the Trump administration says it will resume billions of dollars in payments under the bill.
Initially, the administration said that it would put a freeze on Obamacare’s “risk adjustment” payments to health insurers —to comply with a federal ruling — however on Tuesday, the Health and Human Services Department stepped in to relieve the program.
According to The New York Times, the department has issued a new regulation that will attempt to address a federal judge’s concerns that the program’s implementation was “flawed and hadn’t been adequately justified by federal regulators.” Freezing the program would have resulted in billions of dollars being at stake, according to a 2017 estimate from the Centers for Medicare and Medicaid Services, which administers the risk adjustment program.
”Risk adjustment is the core of a stable individual market,” Caroline Pearson, a senior fellow at the University of Chicago’s NORC, told Vox. “The market cannot function well without it.”
According to HuffPost, some insurers have sued the federal government for being treated unfairly by the current system. In one case, a federal judge in New Mexico reportedly “sided with the plaintiffs and declared the formula invalid, at least until the federal government could explain its rationale.” Since the ruling, the Trump administration has asked the judge to reconsider his stance.
“This rule will restore operation of the risk adjustment program, and mitigate some of the uncertainty caused by the New Mexico litigation,” Seema Verma, the CMS administrator, said in a statement. “Issuers that had expressed concerns about having to withdraw from markets or becoming insolvent should be assured by our actions today. Alleviating concerns in the market helps to protect consumer choices.”
