US Raises Medicare Payments to Insurers by 45 percent


The federal government said on Friday that it would raise payments to health insurance companies by 45 percent in 2018. The Centers for Medicare and Medicaid Services made the announcement as Congress is considering repealing and replacing the Affordable Care Act.

The agency did not specify which insurers or how many it would be raising payments for. But insurers have long complained about losses on the Obamacare marketplaces, and some pulled out of markets because of financial losses.

Insurers that remain in the marketplaces have said that the federal government has not provided enough clarity on how it will run the marketplaces going forward.

Many insurers raised their premiums for 2018, in part because of a lack of government support and in anticipation that President Trump would pull back from making certain subsidies.

The increase announced Friday is roughly equal to the cost of the insurance subsidies paid by the government.

The new payment schedule is for “risk adjustment,” a program that shifts money from insurers with healthier customers to companies with sicker, more expensive enrollees. The idea behind risk adjustment is to incentivize insurers not to avoid covering people who are likely to have high medical costs.

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