CMS offers plan to restore risk adjustment program payments

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The Trump administration is taking steps to resume paying billions of dollars to health insurers under Obamacare.

The move, coming in the form of a regulatory maneuver from a federal agency, would enable the resumption of payments to insurers who treat a higher percentage of patients with costly healthcare bills. The steps resolve an issue that threatened to undermine the health law and risked raising health insurance premiums in 2019.

The Centers for Medicare and Medicaid Services on Tuesday posted a rule designed to allow payments under the Affordable Care Act’s so-called risk-adjustment program to continue. The payments, worth $10.4 billion for 2017, had been halted by a judge’s ruling, and insurers have been pushing CMS for a quick fix.

“This rule will restore operation of the risk-adjustment program,” CMS Administrator Seema Verma said in a statement. “Issuers that had expressed concerns about having to withdraw from markets or becoming insolvent should be assured by our actions today.”

Insurers had warned they might have to raise Obamacare premiums for 2019 if the dispute wasn’t resolved quickly. The risk adjustment program transfers money from insurers with healthier customers to ones with sicker customers, and doesn’t cost the federal government money. It’s designed to help ensure that health plans don’t seek to sign up only healthy customers for their plans.

Among publicly traded insurers, Centene and Molina Healthcare owe money to other insurers under the program, while Anthem is set to receive funds. CMS announced that the payments had been suspended on July 7.

Bloomberg News