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CMS freezes $10.4B in risk adjustment payments — 4 insights

CMS will not make $10.4 billion in payments that were due to insurers under the ACA. 

Here's what you should know:

1. The payments were required under the ACA's "risk adjustment program" to offset costs for insurers whose customers need expensive medical services. They were due to insurers in the fall for expenses from 2017.

2. CMS Administrator Seema Verma said the suspension is based on a legal dispute over the formula used to calculate risk adjustment payments. About three years ago, a New Mexico federal court ruled the formula was flawed, but a Massachusetts judge found it to be fair, according to The Washington Post.

3. The Blue Cross Blue Shield Association President Scott Serota told The Washington Post the decision "will significantly increase 2019 premiums for millions of individuals and small business owners" and harm access to affordable coverage.

4. America's Health Insurance Plans President Matt Eyles said the decision could create market uncertainty as insurers decide whether to participate in ACA marketplaces for 2019 and increase premiums for many health plans, The Washington Post reported.

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