Insurers Urge a Quick Fix After Obamacare Payment Suspension

(Bloomberg) -- Insurance-industry groups are pushing the Trump administration to resolve a legal dispute that led to the suspension of billions of dollars of payments that help stabilize Obamacare’s markets.

The groups say the U.S. Centers for Medicare and Medicaid Services could quickly resume distributing the risk-adjustment funds by issuing what’s known as an interim final rule for the program. Doing so could help address a legal ruling that led the government to say this weekend it would halt the payments.

“We’re urging CMS to find a legal or regulatory path that allows immediate action to reinstate these payment transfers and ensure that coverage for millions of Americans is not disrupted,” Kris Haltmeyer, vice president for legislative and regulatory policy at the Blue Cross Blue Shield Association, said in a statement. “Quickly issuing an interim final rule to justify the use of the current process is one route.”

The payments, worth $10.4 billion for 2017, are part of a program in the Affordable Care Act meant to help balance the insurance markets when some insurers inevitably got stuck with sicker, more costly patients.

CMS stopped the payments after a federal court found the formula used to calculate them flawed earlier this year. The government asked the court to reconsider its ruling.

An interim final rule goes into effect immediately, but can be altered later. Typically, agencies publish proposed rules to allow time for public comment before they go into effect.

Ceci Connolly, who runs the Alliance of Community Health Plans, said the administration could do more to ensure the payments are quickly made, such as issuing the interim final rule, or pursuing other legal avenues. If that doesn’t happen, some insurers may need to boost their premiums for 2019, she said.

“The insurance business is about predictability and certainty and this is just one more twist,” Connolly said. “If you’re an actuary and you’re pricing risk, you price to cover uncertainty, and so it is natural to expect that some plans will have to increase premiums.”

America’s Health Insurance Plans, another large industry group, declined to comment.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett, Cecile Daurat

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