Insurers may take hit after payment freeze

SIOUX FALLS (AP) – Some South Dakota insurers may lose millions as President Donald Trump’s administration moves to freeze payments under an Affordable Care Act program that protects insurers with sicker patients.

Experts argue that the decision likely won’t topple the state’s insurance market, but could drive up premiums next year, the Argus Leader reported.

The Centers for Medicare and Medicaid Services announced Saturday a suspension of payments part of the so-called “risk adjustment” program that shuffles money from insurers with healthier customers to companies with sicker enrollees. It’s the administration’s latest action to disrupt the health care law that Trump has attempted to repeal.

The agency said the administration’s decision stems from conflicting court ruling in lawsuits filed by some small insurers who question whether they’re being treated fairly under the program.

Federal data shows suspending payments could cost Sanford Health Plan more than $5 million, while other insurers in South Dakota could save funds.

Sanford Health President Kirk Zimmer said the move creates uncertainty, confusion and apprehension that could increase 2019 insurance rates. But he assured South Dakota customers that there’s no reason to panic.

“These rates that we’re looking at now are not going to be of catastrophic nature,” Zimmer said.

South Dakota’s insurance market can likely take the hit, unlike other states that may be facing more obstacles, said Debra Muller, CEO of Avera Health Plans.

“This is going to roil the market nationally,” she said. “But it doesn’t necessarily mean it will roil the market here in South Dakota.”

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