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Health Insurers Warn of Market Turmoil

On July 7, the Trump administration said it was suspending the Affordable Care Act’s risk adjustment program in a move that could increase uncertainty in the health insurance markets.
July 10, 2018

On July 7, the Trump administration said it was suspending the Affordable Care Act’s risk adjustment program in a move that could increase uncertainty in the health insurance markets and boost premiums this fall. Insurers that enroll large numbers of unhealthy people depend on the risk adjustment payments, which are intended to reduce incentives for insurers to seek out healthy consumers and avoid those with chronic illnesses and other pre-existing conditions. Officials said they decided to suspend the payments due to a February ruling in federal district court in New Mexico, in which the judge determined that the formula used to calculate payments was flawed.

The Blue Cross Blue Shield Association said it was “extremely disappointed” with the administration’s action. The move “will significantly increase 2019 premiums for millions of individuals and small business owners and could result in far fewer health plan choices,” association president Scott Serota said in a statement. “It will undermine Americans’ access to affordable coverage, particularly those who need medical care the most.”

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