"Longer-term, I think that the administration's walk-back of risk-adjustment payments penalizes those payers that did, in fact, attempt to enroll participants without bias to health status, and unfortunately it also rewards those payers that for whatever reason made a decision to play it that much safer and do their best to recruit healthy individuals", Abrams says.
To fully understand the administration's latest move, a little history is in order. The reality is sick people do rack up more health care costs.
Seemingly every move the Trump administration has made when it comes to healthcare has been created to maximize the harm to the insurance programs launched or expanded under Obamacare. Without this program, insurers might have taken on less risk in the market, especially in rural counties.
The agency once again defended the decrease by saying that navigators, which usually hail from non-profit and community organizations, are not effective.
The Centers for Medicare and Medicaid Services, the federal agency that oversees ACA funding, said in a statement that navigators are inefficient, signing up a fraction of all ACA customers, and unnecessary as the ACA enters its sixth year and the public is increasingly familiar with health insurance. The announcement comes in the midst of the annual rate-filing period when insurers announce their estimated premium prices and plans for coverage to state regulators. It's also taken other actions recently that will increase costs. "The administration has said they were disappointed with the New Mexico ruling, and they want to work it out", said Greg Fann, consulting actuary for Axene Health Partners and fellow of the Society of Actuaries. And the number of insurers planning to offer policies through the Obamacare exchanges has increased.
"Risk adjustment is a Congressionally-mandated program that supports both the individual and small group health insurance markets", he said. "In general, when there's uncertainty in the market, insurers will cushion themselves however they can", she said.
It's the only remaining risk mitigation program in Obamacare. Block grants to the states would be based on ACA subsidies and the cost of Medicaid expansion "as of a fixed date", i.e., frozen, putting "federal spending on real budget", according to the plan. "It's time for the navigator program to evolve, which is why we are announcing a new direction for the program today", said CMS administrator Seema Verma.
It also said last year's cuts had minimal impact, as year-over-year enrollment dipped slightly, to 11.8 million from 12.2 million, and that navigators enrolled less than 1 percent of HealthCare.gov customers overall. That's because on Tuesday, CMS announced another major cutback to its health insurance counseling program.
Navigators will be "encouraged to demonstrate how they provide information to people who may be unaware of the range of available coverage options in addition to qualified health plans, such as association health plans, short-term, limited-duration insurance and health reimbursement arrangements", the CMS statement said.
Photo by Associated Press /Times Free Press.