The announcement came as insurers were awaiting an annual report that usually comes at the end of June, informing them of whether they owe money into the risk adjustment program or will be paid out for the previous year. The move is just the newest in a series of attempts by Trump's administration to disrupt the insurance markets that the Affordable Care Act depends on to function.
"Risk adjustment under the ACA has been an example of a well-meaning regulation that has had destructive impacts directly contrary to its intent", Jonathan Halvorson, a health care public policy adviser at consulting firm Sachs Policy Group, stated in an article for The Health Care Blog. "As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", CMS administrator Seema Verma reportedly said in a statement. "It has also led to upstarts, small plans and unprofitable ones paying billions of dollars to larger, more established and profitable insurers".
In January this year, the federal district judge in MA upheld the methodology used by the federal government to calculate risk adjustment payments.
Reuters' characterization of the move is that "President Donald Trump's administration has used its regulatory powers to undermine Obamacare after the Republican-controlled Congress past year failed to repeal and replace the law". "And costs for taxpayers will rise as the federal government spends more on premium subsidies".
An insurance industry source said one fix the industry is pushing for is providing that additional explanation to the court, through what is known as an interim final rule, in order to resume payments. In a March 2018 ruling out of New Mexico, US District Court Judge Thomas Browning that the methodology used by the federal government was "arbitrary and capricious" and remanded it back to the agency, according to Lexis Legal News.
The main insurance trade associations in Washington have been organizing calls with their member companies and trying to coordinate a response.
State officials, with bipartisan support from both Gov. Larry Hogan and the General Assembly, asked the federal agency this spring for permission to establish a reinsurance program that would create a $462 million fund for insurers to cover the most expensive claims.
Health law experts are... Some insurances have even expanded their presence in states where they were already operating with help from the Affordable Care Act. Donald Trump's move to gut Obamacare guarantees it. Eventually, experts say, some insurers could simply get fed up and exit ObamaCare markets, leading to fewer choices for consumers.