Risk Adjustment

2019 OPEN ENROLLMENT ENDS (most states)

Time: D H M S

The big story in the 2017 Risk Adjustment report from CMS over the weekend is, of course, the fact that CMS has decided to freeze $10.4 billion in revenue transfers (or $5.2 billion, depending on your POV) in response to a judgicial ruling in a New Mexico lawsuit.

However, before the actual table breaking out all the carriers by state and how much each owes/is owed, the report includes some other interesting wonky data stuff about 2017 enrollment. Most of it wasn't of much interest to me, but one bar graph caught my eye:

This morning, CMS released the 2017 Risk Adjustment Summary Report for the Individual, Catastrophic and Small Group markets. As I noted at the time, the total amount of money we're talking about being shifted around here is around $10.4 billion, with around $7.5 billion in the individual market, $2.9 billion in the small group market and just $42 million in the catastrophic market.

However...this isn't actually a matter of insurance carriers being owed $10.4 billion. Because of how Risk Adjustment (RA) works, it's actually half as much as that--around $5.2 billion is owed by some carriers to other carriers.

OK, I wasn't expecting this at 10:40pm on a Friday night, but here you go...via Stephanie Armour and Anna Wilde Mathews of the Wall St. Journal:

Trump Administration Expected to Suspend ACA Program Related to Insurer Payments

The Trump administration is expected to suspend an Affordable Care Act program that plays a key role in the health law’s insurance markets, a move that could deal a financial blow to many insurers that expect payments.

The suspension of some payouts under the program, known as risk adjustment, could come in the wake of a recent decision by a federal judge in New Mexico, who ruled that part of its implementation was flawed and hadn’t been adequately justified by federal regulators, people familiar with the plans said.