The Trump administration said on Saturday it is freezing payments under an "Obamacare" program that protects insurers with sicker patients from financial losses, a move that is expected to increase premium increases next year.
At stake there are billions in payments to insurers with sicker clients.
In a weekend announcement, the Centers for Medicare and Medicaid Services said the administration is acting because of a conflicting court ruling in lawsuits filed by some smaller insurers that question whether they receive fair treatment under the program.
The so-called "risk adjustment" program takes payments from insurers with healthier clients and redistributes that money to companies with sicker members. Payments for 2017 are $ 10.4 billion. There are no subsidies of taxpayers involved.
The idea behind the program is to eliminate the financial incentive for insurers to better select healthier clients. The government uses a similar approach with private Medicare insurance plans and the Medicare prescription drug benefit.
The main insurance groups said on Saturday that the administration's action interferes with a program that is working well.
The Blue Cross Blue Shield Association, whose members are one of the pillars of the Affordable Care Act coverage, said he was "extremely disappointed" with the administration's action.
The Trump administration's measure "will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan options," badociation president Scott Serota said in a statement. release. "It's going to undermine Americans' access to affordable coverage, particularly those who need more medical care."
Serota said the payments are mandatory by law and said he believes the administration has the legal authority to continue to do so despite court cases. He warned of "confusion" when insurers finalized their rates for 2019.
The health insurance plans of the United States, the main commercial group of the health insurance industry, said in a statement that they are "very discouraged" by the decision of the Trump administration to freeze payments.
"Costs for taxpayers will increase as the federal government spends more on premium subsidies," the group said.
Rumors that the Trump administration would freeze payments were circulating late last week. But Saturday's announcement via email was unusual for such an important step.
The administration argued in its announcement that its hands were bound by contradictory judicial decisions in New Mexico and Mbadachusetts.
Medicare and Medicaid administrator Seema Verma said the Trump administration was disappointed by a New Mexico court ruling that questioned the operation of the risk program for insurers.
The administration "has asked the court to reconsider its decision, and expects a prompt resolution that will allow (the government) to avoid further adverse impacts on Americans who receive their insurance in the individual and small group markets," he said.
More than 10 million people currently purchase individual health insurance plans through HealthCare.gov and the state insurance markets. The vast majority of those clients receive subsidies from taxpayers under the Obama era health law and would be protected from premium increases next year.
The weight of the higher prices would fall on solid middle clbad consumers who are not eligible for income. subsidies based Many of them are self-employed and owners of small businesses, generally seen as a Republican electorate.
The latest outbreak of "Obamacare" does not affect the majority of people with employer coverage.