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Trump administration freezing billions in health insurance payments

Jul 9, 2018

Credit www.thinkprogress.org

The Trump administration is suspending a federal program that sent billions of dollars from health insurers with largely healthy customers to insurers with larger numbers of customers with chronic illnesses or other pre-existing conditions.

The Centers for Medicare and Medicaid Services, the federal group that oversees the program, said the payments were designed to reduce chances of insurance companies seeking out and providing coverage to only healthy patients.

Leslie Moran, a senior vice president at the New York Health Plan Association, an insurance industry group, said she sees it the same way: redistributing money among insurance carriers with varying risk pools “helps guard against what’s known as ‘cherry-picking,’ which is where insurers could just take on the healthier, younger populations.”

Gov. Andrew Cuomo said in a statement that the suspension “upends a fundamental principle of the Affordable Care Act that aims to ensure access to affordable health care insurance for those who need it the most.”

The program’s freeze comes after a federal judge in New Mexico ruled that the formula it used to redistribute the money was flawed.

Medicare and Medicaid Services said in a statement that it was “seeking a quick resolution to the legal issues,” but Moran said even a temporary pause is disruptive to businesses.

“If you’re a company that expected to get risk adjustment payments and you lose those payments, you have to make it up somehow, so it could increase the cost for some coverage,” Moran said.

Two Rochester-area insurance providers, Excellus BlueCross BlueShield and MVP Health Care, said it’s too early to know how the suspension of the federal program will affect their customers.