The Centers for Medicare and Medicaid Services, which administers programs under the Affordable Care Act, said the action affects $10.4 billion in risk adjustment payments.
CMS said that the amount frozen for the 2017 benefit year is $10.4 billion, which is drawn from insurers to go to other insurers.
In the meantime, some health insurers are potentially out billions of dollars.
"We were disappointed by the court's recent ruling", CMS Administrator Seema Verma said in the agency's statement.
The risk-adjustment program, which does not cost taxpayers any money and is required by law, is created to ensure that health care coverage is available for sicker, higher-cost patients by sharing the cost of covering them. No taxpayer subsidies are involved.
The idea is to remove the financial incentive for insurers to "cherry-pick" healthier customers.
Navigators will be "encouraged to demonstrate how they provide information to people who may be unaware of the range of available coverage options in addition to qualified health plans, such as association health plans, short-term, limited-duration insurance and health reimbursement arrangements", the CMS statement said.
The Affordable Care Act's (ACA) "risk adjustment" program is meant to incentivize health insurers to cover individuals with pre-existing and chronic conditions by collecting money from insurers with relatively healthy enrollees to offset the costs of other insurers with sicker ones. Health law experts are...
The CMS statement said the agency has asked the New Mexico court to reconsider its decision and expressed hope for a prompt resolution of the issue.
Officials with CareFirst BlueCross BlueShield, one of two Maryland insurers that sell Affordable Care Act plans, said they need the payments to keep that part of their business afloat.
Serota noted that the payments are required by law, and said he believes the administration has the legal authority to continue making them despite the court cases.
Insurance is normally based on risk, with premiums costing more for clients who are expected to require more healthcare services. Through the program, roughly 20 million Americans have received health care coverage. New Mexico's ruling alone isn't enough to freeze payments, unless, he says, it's a "politically motivated" move to further disrupt the ACA.
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