Trump administration suspends ACA risk-adjusted payments

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  • CMS is freezing $10.4 billion in Affordable Care Act risk-adjusted payments, designed to stabilize the insurance market by redistributing money to insurers with higher-cost members. With the program on hold, premiums are expected to rise in 2019.
  • Citing two conflicting federal court cases on the use of statewide average premiums in its decision, CMS said it cannot collect or redistribute funds for risk-adjusted payments. In February, the U.S. District Court of New Mexico found the program to be based on flawed equations, and the agency has asked the court to reconsider its ruling, according to a recent statement.
  • Insurers are frustrated by the decision to halt the payments, with America’s Health Insurance Plans warning of “serious consequences for millions of consumers,” while Blue Cross Blue Shield Association CEO Scott Serota said the decision will “significantly increase 2019 premiums.”
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