For Consumers

Kreidler urges federal agency to quickly resolve risk adjustment suspension

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July 11, 2018

OLYMPIA, Wash. – Washington state Insurance Commissioner Mike Kreidler today urged the administrator for the federal Centers for Medicare and Medicaid services (CMS) to quickly resolve the suspension of risk adjustment payments to health insurers so that consumers are not harmed. 

In his letter to Seema Verma (PDF, 3 MB), Kreidler said consumers will be the “ultimate losers” if the federal government fails to find a quick resolution to the July 7 suspension of $10 billion in payments to health insurers across the nation, including in Washington state.

The risk adjustment payments are required by the Affordable Care Act. Verma said the suspension was necessary because of a federal court ruling in New Mexico five months ago. The decision challenged the formula for determining the payments. 

A federal court in Massachusetts in January found no issue with the same formula. The payments encourage health insurers to enroll more consumers in plans and offer some financial help to cover the costs of individuals with higher medical care. 

Kreidler said 270,000 Washington residents who buy coverage through the individual market will face higher premiums and fewer choices for plans if CMS does not take an interim action to resolve the suspension. 

Kreidler added that CMS has other options available other than “a potentially lengthy resolution of a court appeal.”

Kreidler's July 9 statement: Trump action signals continuing moves to harm individual health insurance