The government froze payments on Obamacare: what to expect interest

The Trump administration stated that a recent court ruling did not allow it to make payments to health insurance companies, which, according to the Affordable Care Act, rely on billions of dollars.

The payments in the amount of 10,4 billion dollars were frozen in accordance with the government payment program in order to equalize the risk, in which funds are withdrawn from insurance companies with healthier customers and redistributed between companies with less healthy ones.

Federal courts in New Mexico and Massachusetts have made conflicting decisions regarding the redistribution of payments formula. A Massachusetts court found no problems in it, while a court in New Mexico stated that the federal government uses an inaccurate formula.

On Saturday, the Trump administration sent an email (which is an unusual step when it comes to a decision regarding billions of dollars), in which it stated that it could not continue to redistribute funds in the context of conflicting court decisions.

“As a result of this lawsuit, payments and charges for risk balancing are suspended,” said Sima Verma, administrator of the Centers for Administration of the Medicare and Medicaid Programs (Centers for Medicare and Medicaid Services).

The Office of Verma reported that it appealed to the court of New Mexico with a request to reconsider its decision.

Administration Centers for Medicare and Medicaid are administered by the US Department of Health and Human Services. One of their tasks is to manage a payment program for risk mitigation.

Large insurance companies expressed disappointment with the actions of the administration, noting that they could lead to an increase in health insurance premiums for millions of people and small businesses.

President Donald Trump during the election campaign promised to repeal the Law on Affordable Health Care, also known as Obamacare.

Last year, the Republican-controlled Congress could not cancel and replace it. However, the president issued a number of decrees that weakened the law.

About 20 millions of Americans received health insurance under the Affordable Care Act.

Large insurance companies said Saturday that the Trump administration is interfering with a program that works well.

Scott Serota, president of the Blue Cross Blue Shield Insurance Association, said that the Trump administration’s actions would lead to "a significant increase in insurance premiums for millions of people and small business owners in 2019 and could result in a significant reduction in the choice of health insurance plans."

According to him, they also "undermine the access of Americans to affordable insurance coverage, which may particularly affect those who most need medical care."