The Trump administration is preparing to halt some bills being paid under the Affordable Care Act’s risk adjustment program. The move is just the newest in a series of attempts by Trump’s administration to disrupt the insurance markets that the Affordable Care Act depends on to function.
The Wall Street Journal reported on Friday that the Centers for Medicare and Medicaid Services (CMS), the agency that oversees the program, is considering the temporary halt of payments to insurers this fall and next fall.
Trump’s team is considering the move after a federal court decision found the formula for calculating the risk adjustment payments to be flawed. The ruling from New Mexico US District Court Judge Thomas Browning, says the federal government has been using an “arbitrary and capricious” method to determine payments.
The Risk adjustment formula is a key component of Obamacare, allowing for market stabilization.
How The Risk Adjustment Works
The program transfers funds from lower-risk enrollee plans to higher-risk ones, allowing the market to spread risk evenly.
The Kaiser Foundation says the program “encourage insurers to compete based on the value and efficiency of their plans rather than by attracting healthier enrollees.”
Trump and his team have continued to argue that the individual mandate is unconstitutional and has promised to refuse to defend any parts of Obamacare in court. Meanwhile, the GOP has also suggested that pre-existing conditions should not be covered, a move that would leave millions of Americans without access to affordable healthcare.
Trump continues to attack Obamacare even as nearly a dozen insurers have started to warm to the program with at least a dozen states seeing an increase in the number of insurers participating in the healthcare exchange. Some insurances have even expanded their presence in states where they were already operating with help from the Affordable Care Act.