Health insurers warn of premium hikes after Trump withholds ObamaCare payments
On Sunday, the insurance industry and outside analysts warned that the Trump administration's decision Saturday to at least temporarily withhold $10.4 billion in risk-adjustment payments to insurance companies will likely drive up premiums and might force more insurers out of the Affordable Care Act's marketplace. The risk-adjustment payments are a mechanism the ACA — also known as ObamaCare — uses to reimburse insurance companies for covering people with pre-existing conditions and chronic illness, ostensibly paid for by profitable insurers with relatively healthier clients.
Creating this "new market disruption" at the "critical time" when insurers are setting next year's premiums "will create more market uncertainty and increase premiums for many health plans — putting a heavier burden on small businesses and consumers, and reducing coverage options," the insurance industry group America's Health Insurance Plans (AHIP) said in a statement. "And costs for taxpayers will rise as the federal government spends more on premium subsidies." Eric Hillenbrand at AlixPartners consulting group said the move will affect whether insurers decide to "participate in the exchanges" as well as "what premiums to charge if they do."
The Centers for Medicare and Medicaid Services (CMS) said it is suspending the payments because of conflicting court rulings — in January, a federal court in Massachusetts upheld the ACA's risk-adjustment formula while a federal court in New Mexico invalidated it in February. CMS Administrator Seema Verma, an ACA critic, said the Trump administration was "disappointed" in the New Mexico court's decision and asked it to reconsider. But the Trump administration has been taking administrative steps to undermine ObamaCare after its legislative efforts failed last summer, as well as thwarting efforts to shore up the law. What the Trump team's "effectively doing is dismantling pieces of [the ACA] without replacing them," Hillenbrand tells Reuters. "It moves us back to some extent to the status quo where people with pre-existing conditions found it very difficult to get insurance."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.
-
Geoff Capes obituary: shot-putter who became the World’s Strongest Man
In the Spotlight The 'mighty figure' was a two-time Commonwealth Champion and world-record holder
By The Week UK Published
-
Israel attacks Iran: a 'limited' retaliation
Talking Point Iran's humiliated leaders must decide how to respond to Netanyahu's measured strike
By The Week UK Published
-
Crossword: November 2, 2024
The Week's daily crossword puzzle
By The Week Staff Published
-
US economy still strong in final preelection report
Speed Read It grew at a solid 2.8% annual rate from July through September
By Peter Weber, The Week US Published
-
Boeing machinists reject deal, continue strike
Speed Read The rejection came the same day Boeing reported a $6.2 billion quarterly loss
By Peter Weber, The Week US Published
-
Ports reopen after dockworkers halt strike
Speed Read The 36 ports that closed this week, from Maine to Texas, will start reopening today
By Peter Weber, The Week US Published
-
Empty-nest boomers aren't selling their big homes
Speed Read Most Americans 60 and older do not intend to move, according to a recent survey
By Peter Weber, The Week US Published
-
Brazil accuses Musk of 'disinformation campaign'
Speed Read A Brazilian Supreme Court judge has opened an inquiry into Elon Musk and X
By Rafi Schwartz, The Week US Published
-
Disney board fends off Peltz infiltration bid
Speed Read Disney CEO Bob Iger has defeated activist investor Nelson Peltz in a contentious proxy battle
By Rafi Schwartz, The Week US Published
-
Disney and DeSantis reach detente
Speed Read The Florida governor and Disney settle a yearslong litigation over control of the tourism district
By Peter Weber, The Week US Published
-
Visa and Mastercard agree to lower swipe fees
Speed Read The companies will cap the fees they charge businesses when customers use their credit cards
By Peter Weber, The Week US Published