Hold on ACA program leaves millions in health plan transfers in limbo
The Trump administration has placed a hold on a program that would have shifted tens of millions of dollars between insurers serving the Affordable Care Act marketplace in Illinois, officials announced over the weekend.
Under the risk adjustment program, companies with healthier consumers make payments that are transferred to companies with sicker enrollees. Some insurers have sued over the program, arguing that the formula the federal government uses to determine payments is flawed.
This weekend, CMS announced it couldn’t make the collections or payments, including amounts for the 2017 benefit year, citing a February ruling from a federal court in New Mexico. The program would have transferred $10.4 billion for plan year 2017 between different insurers.
“As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold,” CMS Administrator Seema Verma said in a Saturday statement. “CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution.”
The suspension drew concerns from some insurers. Blue Cross and Blue Shield of Illinois expected to see $151.7 million for plan year 2017, according to a CMS report released Monday.
“These transfers between insurance carriers are designed to keep costs down and ensure all consumers regardless of health status have access to health insurance and receive the care they need,” spokeswoman Colleen Miller wrote in an email. “We are currently assessing the implications and any potential impacts as a result of this development.”
Centene was set to pay $77.8 million. Cigna, which was set to pay $53.4 million for plan year 2017, referred comment to America’s Health Insurance Plans, which called for a “quick resolution.” They noted the decision to freeze payments comes at a time when plans are developing rates for 2019 and states are reviewing them.
“This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own,” the group noted in a statement. “It will create more market uncertainty and increase premiums.”
Meanwhile, New Mexico Health Connections, the insurer that sued over the formula, argued that a Monday release of a report detailing risk adjustment transfers for 2017 shows that the formula disadvantages some plans.
“Getting this program fixed will lead to a more stable and affordable market,” the insurer noted. “It will attract more insurance companies because the risk adjustment will be more predictable and will no longer penalize newer, lower-cost insurance companies with innovative approaches to delivering better and more affordable care.”
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