More Changes to ACA from CMS

July 11, 2018

In the last week, two significant changes to the Affordable Care Act (ACA) have been made by the administration. The first ACA change will stem payments to insurance companies to help subsidize higher-cost individuals, and the second is a cut in the funding for outreach programs.

On July 7, the Centers for Medicare and Medicaid Services (CMS), announced they would suspend risk-adjustment payments to insurers due to a federal ruling in a lawsuit by a New Mexico insurer that claimed the payments were arbitrary and unfair. In 2017, these payments amounted to about $10.4 billion and were disbursed among various insurance companies with the intended goal of helping to balance the insurance market to account for less healthier and therefore more costly individuals.

The administration has said it will halt both the payments as well as the collections from other insurance companies with healthier populations that contribute toward the fund for these risk-adjustment payments.

On Tuesday, July 10, the administration announced yet another major cut in funding for outreach. These funds typically go to external organizations and nonprofits, known as “navigators,” charged with publicizing the ACA and encouraging people to sign-up during the enrollment periods. The cut means that these programs for 2019 will receive $10 million, down from $36 million in 2018 and nearly $63 million in 2017.

According to CMS, the these navigators enrolled less than one percent of those who signed up on the federal exchanges during the 2018 open enrollment period, and almost 80 percent of navigators failed to reach their enrollment goal.