House & Senate Democratic Health Leaders Demand Trump Administration Work to Stabilize Insurance Markets

HHS Decision to Halt Risk Adjustment Program is Administration’s Latest Attempt to Sabotage the Health Care System; Threatens to Raise Premiums for Millions of Families and Disrupt Market

WASHINGTON – Today, five House and Senate Democratic health leaders demanded that the Trump Administration reverse its decision to halt the Affordable Care Act’s (ACA’s) risk adjustment program, a move that threatens to increase the health care costs of millions of families by sowing further uncertainty into individual and small group health insurance markets.  Risk adjustment payments are crucial to maintaining market stability and supporting the ACA’s protections for people with pre-existing conditions. 

The Democrats also asked the administration to provide additional information regarding the decision to halt collections of fees and distribution of payments in their letter to Health and Human Services (HHS) Secretary Alex Azar and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma.

“The administration’s decision to suspend these collections and payments, which are required under federal law, appears to be yet another attempt by the Trump administration to sabotage the nation’s health care system for partisan gain,” the Democrats wrote to Azar and Verma.  “We ask that you take immediate action to reverse this destructive decision that will further destabilize the individual and small group markets that millions of Americans rely on for health insurance.”

The letter was signed by House Education and the Workforce Ranking Member Bobby Scott (D-VA), House Energy and Commerce Ranking Member Frank Pallone, Jr. (D-NJ), House Ways and Means Ranking Member Richard Neal (D-MA), Senate HELP Ranking Member Patty Murray (D-WA), and Senate Finance Ranking Member Ron Wyden (D-OR).

The suspension of the risk adjustment program is prompting concerns that insurers will leave the market or increase premiums for consumers.  As the agency’s own risk adjustment report illustrates, suspending the program will result in major financial windfalls for some companies with healthier than average enrollees, and will result in huge and unexpected losses for others. These losses could result in increased premiums, and insurers pulling out of the market.

On July 7, 2018, following a report in the Wall Street Journal describing CMS’s forthcoming plan to suspend risk adjustment payments and collections, CMS issued a press release saying it was necessary to suspend the program due to a February 28, 2018 decision of the United States District Court for the District of New Mexico in the case of New Mexico Health Connections v. Burwell.

In its ruling, the district court made clear that CMS must provide its rationale for requiring the risk adjustment program to be budget neutral.  The Democrats wrote that the agency could do so immediately by issuing an Interim Final Rule (IFR), laying out its rationale for requiring budget neutrality for the 2014-2018 plan years, as it already did for 2019. 

“We disagree with the agency’s characterization that the suspension of the risk adjustment program is necessary.  It is clearly within the agency’s power to remedy the issue identified by the district court,” the Democrats continued.  “It is unclear why the agency has not already done so, as the district court’s decision was handed down in February, and it is now July.”

The Democrats also requested additional information from HHS and CMS, including:

  • Who at CMS and/or HHS was primarily responsible for the decision to seek a reconsideration of the district court’s decision rather than seek a stay or simply address the court’s concern through an IFR and allow the risk adjustment program to continue to operate?  When was this decision made?  Provide a list of all personnel involved in making the decision.
    • Did anyone at the White House or Executive Office of the President provide input in this decision?  If so, provide a list of all personnel involved in the decision.
    • Provide all documents and communications related to the decision to suspend the risk adjustment program.
  • What plans, if any, do CMS and/or HHS have in place to ensure that risk adjustment payments to insurers are not unnecessarily delayed? 
  • Please provide any and all analyses conduct by CMS and/or HHS to determine the impact that the indefinite suspension of the risk adjustment program will have on premiums and market stability in the individual and small group markets.

The letter is available here.


Press Contact

Scott: Josh Weisz (202) 226-0853