As insurers file rates, freeze to Obamacare payments injects uncertainty in Louisiana
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Risk adjustment was one of three main programs under the Affordable Care Act, commonly known as Obamacare, that aimed to stabilize health insurance premiums.
The risk adjustment freeze by CMS raises further questions about the health of the Affordable Care Act's individual market in
Only two insurers --
Those who are low-income typically receive subsidies that offset increasing health insurance rates, while the others get hit with the full brunt of higher premiums.
"The risk adjustment program is an important part of making the ACA's individual marketplace financially stable," Blue Cross Louisiana spokeswoman
Wakefield added
Nationally, the
"We're going to wait until this thing is finalized," Justice said. "We still think it's early. There may still be some adjustments before the end of the year."
The risk adjustment program applies to individual health plans both on and off the ACA exchange, as well as small group plans. It is funded entirely through shifting money between insurers. In
The move halting the payments is only the latest in a string of changes to the nation's health insurance system that threatens the individual market, where people who don't get coverage from their employer or other government programs can buy health insurance.
Last year, the Trump administration ended federal cost-sharing reduction payments to insurers, a move that cost
Previously, a federal reinsurance program expired as scheduled under the ACA in hopes states would step in. Donelon unsuccessfully pushed bills at the
While risk adjustment payments may resume some time in the future, observers say the newfound uncertainty brought on by the decision to halt the payments could further destabilize the individual market.
"Anytime there's uncertainty in the market, insurers are going to try to price that into their premium," said
It is not clear if halting the program now means next year's payments are in doubt, Cox said. But insurers are worried the Trump administration, which has undermined other parts of the ACA, won't make the payments at all.
Despite double-digit premium increases in certain states' individual markets, Cox noted most people who get insurance through the exchanges don't feel the cost of rising premiums. Instead, the federal government picks up the tab through subsidies, a key feature of the ACA that was designed to give lower-income people access to cheaper health care.
In
However, the 15 percent who aren't subsidized feel the full weight of premium hikes. These are people who earn more than 400 percent of the federal poverty level, which is more than
After repeated increases to premiums,
However, she warned that the federal programs aimed at stabilizing the individual market are going away, and nothing is being done on the state level to pick up the slack, given the failure of the reinsurance proposal. That means consumers should expect costs to continue to rise.
"Our politicians are insulated from these rates," Nolan said. "They have no idea how high it is for someone to purchase insurance from the individual exchange if they don't get subsidies."
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