The Trump administration is bound by a federal court decision to suspend billions of dollars in ObamaCare payments, Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma said Thursday.
“We really are in a tough spot,” Verma told reporters. “I think that there’s been a lot of discussion about whether the Trump administration is making a decision. We’re not making a decision. The court has told us what to do here … at the end of the day, we have to abide by the court’s ruling.”
In a surprise announcement last week, the administration said it had suspended $10.4 billion in “risk adjustment” funding that is supposed to be paid to insurers to help them provide coverage to particularly sick and costly enrollees.
Insurers decried the move, and have been pressing the administration to resolve the issue and resume the payments, arguing that premiums will rise for ObamaCare enrollees if funding is cut off.
A federal court ruling in New Mexico found the administration did not properly justify its formula for dispensing the funds. Verma said the administration is defending the risk adjustment regulation, even though it was written under the Obama administration.
Verma said CMS is asking the court to reconsider, but until that happens, the agency's hands are tied.
“We’ve been trying to figure out, is there a solution? We understand the impact to the market [but] we have to follow what the courts say,” Verma said.
Legal experts have expressed skepticism that the administration is doing everything it can to fix the problem.
Some have said CMS is being deliberately disruptive because of its hostility to ObamaCare, and that government programs should not be at the mercy of a lone federal judge.
But at the same time, Verma would not say if the administration plans to stop approving state Medicaid work requirement waivers.
A federal judge in D.C. recently blocked Kentucky's waiver that would have imposed work requirements and other restrictions on Medicaid coverage. CMS has approved work requirements in four states to date, and 11 other states have expressed interest.
“I think you’re going to see our response to that very shortly, so I’m not going to comment before we make an announcement,” Verma said.
She noted the Trump administration views state flexibility as important, and is committed to granting as much of it as possible.
“Obviously we’re looking at what we need to do to address the court’s concerns, but it doesn’t change our commitment to giving states flexibility and our commitment to helping people rise out of poverty,” Verma said.