The Obama administration announced on Thursday that it would provide $3.3 billion to the Centers for Medicare and Medicaid Services to help states implement plans to make health care less expensive.
But as the program faces increasing pressure to increase payments to insurers, it could also face an unprecedented crisis if it cannot get a big jump on its next round of payments, which are due on July 1.
The program’s trustees said the new payments will help states prepare for a projected $20 billion in premium increases, with the money being divided between two sets of beneficiaries: high-income seniors and low-income people.
In a statement, the administration said the funds would help states “establish and implement new high-quality plans that reduce premiums and increase health coverage for low- and moderate-income Americans and individuals with disabilities, as well as reduce the impact of health care costs on the solvency of Medicare and other health care programs.”
The new payments come as states and the health care industry are fighting over the best way to address rising costs, which some have said will lead to more Americans losing coverage.
Under the program’s existing payments, the CMS said, states must pay for the cost of administering the Medicare program, which has a cost of $2,300 per beneficiary, by providing coverage for an additional $1,700 per enrollee.
The CMS said the payments would help ensure that seniors and people with disabilities can continue to have access to quality health care coverage without incurring significant additional costs.
The administration said it also is funding about $3 billion in new federal funding to help pay for other health benefits, including for the expansion of Medicaid, which covers low-wage workers, low- to moderate-level workers, and older Americans.
The White House also said that a separate $300 million to help small businesses in states that are trying to lower premiums is also being allocated.