Jul 7, 2018

Trump administration to halt another ACA insurer program

The Trump administration will suspend the ACA's risk adjustment. Photo: Karen Bleier/AFP via Getty Images

The Trump administration may suspend a permanent Affordable Care Act program that prevents health insurance companies from cherry-picking healthy people in the individual marketplaces, the Wall Street Journal reports.

Why it matters: If the government halts the program, called risk adjustment, at a minimum insurers that were expecting payments would hike ACA premiums to make up for big losses. But it also could "inject chaos and uncertainty into the individual insurance market," according to Larry Levitt of the Kaiser Family Foundation, if insurers decide to quit next year.

How it works: Under risk adjustment, insurers that enroll healthier-than-average people compensate insurers that enroll sicker-than-average people. The end result is supposed to be a zero-sum program that encourages companies to sell health plans to all people regardless of their medical histories.

  • Without this compensation mechanism, insurers will have an incentive to avoid enrolling sick people by making plans unattractive to people who have costly diseases.
  • Or insurers could decide to bail on the marketplace if they think it's no longer worth the headache.
  • Risk adjustment was the only permanent health insurer payment program under the ACA. The other two, risk corridors and reinsurance, lasted three years.
  • The federal government was supposed to release a report about the risk adjustment program at the end of June, but it's being held up by litigation from insurers that have argued the program's formula is flawed.

Flashback: The Trump administration similarly undermined ACA insurer payments last year when it stopped paying insurers subsidies that helped low-income people in the ACA marketplaces with their deductibles and out-of-pocket costs.

Go deeper

Netanyahu says July 1 deadline for West Bank annexation won't change

Photo: Artur Widak/NurPhoto via Getty Images

Israeli Prime Minister Benjamin Netanyahu said Monday at a Likud Party faction meeting at the Knesset, Israel's parliament, that his July 1 deadline for starting the process of annexation in the West Bank will not change, according to people in attendance.

Why it matters: The White House and the State Department have stressed over the last few weeks that the deadline set by Netanyahu is "not sacred" to the Trump administration — and that any discussion of annexation needs to be in the context of renewed Israeli-Palestinian peace talks.

Trump threatens to move Republican convention from North Carolina if capacity reduced

President Trump on stage during the 2016 Republican National Convention in Ohio. Photo: Bill Clark/CQ Roll Call via Getty Images

President Trump threatened in a series of Monday tweets to move this summer's Republican National Convention from Charlotte if North Carolina's Democratic governor, Roy Cooper, doesn't allow the event to be held at full capacity.

The state of play: Mandy Cohen, the state's health and human services secretary, said last week that the GOP should "plan for the worst" as mass gatherings will be a "very big challenge" if the number of coronavirus cases in the state continues to increase, per NPR.

The wreckage of summer

Illustration: Sarah Grillo/Axios

We usually think of Memorial Day as the start of the summer, with all of the fun and relaxation that goes with it — but this one is just going to remind us of all of the plans that have been ruined by the coronavirus.

Why it matters: If you thought it was stressful to be locked down during the spring, just wait until everyone realizes that all the traditional summer activities we've been looking forward to are largely off-limits this year.