Trump admin expected to suspend some ObamaCare risk adjustment payments: report

Trump admin expected to suspend some ObamaCare risk adjustment payments: report
© Getty Images

The Trump administration is planning to suspend some payments to insurance companies, a key provision of the Affordable Care Act, this fall following a federal judge's decision, according to The Wall Street Journal.

People familiar with the plans said that the Centers for Medicare and Medicaid Services (CMS) is planning to temporarily suspend some risk-adjustment payments stemming from 2017 business this fall as well as payments next year that would reflect 2018 business.


The move comes after a federal judge ruled that the Obama administration's formula calculating the payments was flawed and inadequately justified by regulators, according to the Journal. CMS has made no public statements regarding policy changes for the risk-adjustment payments as of yet.

CMS was expected to put out a report at the end of June regarding the payments, but that report has not yet been released.

Risk adjustment made up one of the "three Rs" that constitute ObamaCare's program to stabilize health-care markets, as the program causes insurers with healthier customers to reimburse insurers with more expensive and sicker enrollees.

U.S. District Judge James Browning in New Mexico ruled that the formula used by CMS to calculate the payments was flawed after New Mexico Health Connections, the state's healthcare co-op, filed suit over the program in 2016, alleging it favored larger insurance companies.

“The risk adjuster is so disruptive and is also leading to most everyone raising their rates into double digits,” New Mexico Health Connections CEO Dr. Martin Hickey told The Hill in 2016.

The move comes after the Trump administration ended similar payments, known as cost-sharing reduction payments, on a monthly basis last year.

"Based on guidance from the Department of Justice, the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare. In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments," the White House said after ending the payments in October.