Updated 7:48 AM ET, Tue July 10, 2018
That is because the federal government won't distribute $10.4 billion it was expected to give insurers this fall under the Affordable Care Act's risk adjustment program. The administration said Saturday that it would temporarily suspend the payments because a federal judge earlier this year ruled the program's formula was flawed.
Insurers rely on the funding, which serves as a backstop for those who wind up with a high share of costly enrollees. Under the risk adjustment program, insurers with healthier policyholders contribute money, which is then divvied up among carriers with sicker ones. It's the only remaining risk mitigation program in Obamacare. The other two, which were designed to last only three years, ended after 2016.
The administration's latest effort to undermine the Affordable Care Act comes at a particularly sensitive time for insurers. They are now deciding which exchanges they will participate in next year and what premiums they'll charge. Having a risk adjustment program factors into these calculations.
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