Covered California has announced a projected 8.7% rate increase on 2019 health plans despite recent court rulings in New Mexico and Massachusetts. The rulings suspended $10 billion in “risk adjustment” payments meant to
stabilize the insurance market.
The program transfers money from insurers with healthier enrollees to those with enrollees who are more at risk in order to avoid “cherry-picking” by companies who take only the healthiest people.
Despite Congress’s failed attempt last year to repeal and replace the ACA, the Trump administration has been able to weaken the health law by halting subsidies covering some out-of-pocket costs and eliminating the mandate to have insurance.
Critics said that the suspension of payments will drive up costs and further undermine the ACA. Dave Jones, California Insurance Commissioner, maintained that the “Trump administration has just taken another step to sabotage the nation’s health insurance market.”