$10.4 Billion for ACA Insurers Withheld by White House

The Hill reports that the Trump administration halted payments earlier this month to ACA-participating insurers because a federal judge in New Mexico ruled that the administration had not “fully justified its formula for dispensing the funds.” The suspended payments, totaling $10.4 billion, are subsidies due to insurers to compensate them for the reduced deductibles and out of pocket costs they incurred in the course of providing coverage to approximately 7 million low-income people through the ACA.

The White House decision to withhold payment has triggered the owed insurers to consider leaving the ACA markets altogether or demanding sizable rate increases to offset the threat of such insecure reimbursement agreements. Meanwhile, the New York Times notes that “Mr. Trump has said he can stop the payments ‘anytime I want,’ and his budget director, Mick Mulvaney, refers to the subsidies as ‘Obamacare bailout payments’.”

Representative Kevin Brady (R-Tx), chair of the House Ways and Means Committee, is urging prompt payment of the subsidies and has met with DHHS Secretary Alex Azar in an effort to re-start the payments. He is now considering legislative action next week when the House will be voting, according to Brady, “on a range of health-care bills, including expanding health savings accounts and delaying or repealing certain ObamaCare taxes.”

One ironic angle of this dispute is that, as the Hill put it, “No taxpayer money is involved in the program. Instead money is collected from insurers with healthier patients overall and redistributed to insurers with sicker and more costly patients to help cover their costs.” If the government is merely a pass-through for this money, then why does the President feel free to stop payment and why does a New Mexico judge have the power to halt its motion?

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