The Trump administration on Monday announced another nail in the coffin of Obamacare, declaring it would withhold the payment of risk-adjusted premiums to insurers.
The move should not have been unexpected given the administration’s disdain for other provisions of the Affordable Care Act (ACA), leading to the elimination of other key taxpayer-funded subsidies and the outright eradication of the individual mandate through this past winter’s tax cut legislation.
The move sent shock waves through the insurance industry, which claimed that such market disruption could have near-immediate consequences for insured populations.
The announcement was made by Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, and was precipitated by a New Mexico court ruling that suggested the calculations for the risk-adjusted premiums were flawed even despite a Massachusetts ruling that validated them.
The outcome of the decision could send premiums soaring and insurers running for the exits on the ACA exchanges. Some studious observers have noticed that the potential outcomes are intentional — dismantling Obama’s landmark program from the very foundations:
Obamacare is a Jenga tower and it keeps losing blockshttps://t.co/SvV3ZBrLt5
— Dylan Scott (@dylanlscott) July 9, 2018
As reported in The New York Times, the payments seemed designed to benefit larger insurers. The prior administration had assumed incorrectly that the payments and collections would offset and would leave no net obligation to the federal government. This may not be the case.
The news comes on the heels of many predicting better days for insurers in the ACA markets. With premium increases on the horizon, they expected what has been a volatile market to stabilize. This announcement changes things.
In what now seems a rather prophetic statement, a senior vice president of the Kaiser Family Foundation cited the government involvement as the major factor in keeping the market from stabilizing.
“If not for the still significant political and legal uncertainty, we’d be seeing a very robust market right now,” Larry Levitt of Kaiser told The Hill.
The risk-adjusted premium pool takes money from healthier patients paying for health care and redistributes it to the less healthy, more needy patients to pay for higher premiums.
While some may say this means no government money is involved, this ignores the concern expressed in the New Mexico court decision. It also negates the fact that those healthy people were not willing participants in the pool until this year.
This attack on Obamacare will hurt consumers. And it’s not even the government's money. It's a pooled risk fund where low risk insurance companies pay high risk ones for taking on sicker patients. H/t @eugenegu https://t.co/wuGGpxSekS
— Families USA (@FamiliesUSA) July 9, 2018
The bottom line is that the Trump administration is making good on its promise to rid Americans of Obamacare, with or without the help of the legislature.