WASHINGTON (AP) – The Trump administration says it’s freezing payments under an ‘Obamacare’ program that protects insurers with sicker patients from financial losses, a move expected to add to premium increases next year.
At stake are billions in payments to insurers with sicker customers.
Making the announcement Saturday, officials say the administration is acting because of conflicting rulings in lawsuits filed by some smaller insurers who question whether they’re being fairly treated.
The program takes payments from insurers with healthier customers and redistributes the money to companies with sicker enrollees. No taxpayer subsidies are involved.
The idea is to remove the financial incentive for insurers to “cherry-pick” healthier customers. The strategy is also used by Medicare private insurance plans.
Other insurers say the administration’s action interferes with a program that’s working well.