Trump Administration Announces Fix for Halted Obamacare Payments

(Bloomberg) -- The Trump administration announced a regulatory maneuver to allow the resumption of billions of dollars in payments to health insurers under Obamacare, resolving an issue that threatened to undermine the health law and risked raising premiums.

The U.S. 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 Corp. and Molina Healthcare Inc. owe money to other insurers under the program, while Anthem Inc. is set to receive funds. CMS announced that the payments had been suspended on July 7.

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, K. Oanh Ha

©2018 Bloomberg L.P.