Adjusting for risk selection in state health insurance exchanges will be critically important and feasible, but not easy

Health Affairs

Volumn 31, Issue 2, 2012, Pages 306-315

  Weiner, Jonathan P ^a   Trish, Erin ^a   Abrams, Chad ^a   Lemke, Klaus ^a  

^a JOHNS HOPKINS BLOOMBERG SCHOOL OF PUBLIC HEALTH   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; FEASIBILITY STUDY; HEALTH CARE POLICY; HEALTH INSURANCE; HUMAN; RISK ASSESSMENT;

INSURANCE COVERAGE; INSURANCE, HEALTH; MODELS, THEORETICAL; PATIENT PROTECTION AND AFFORDABLE CARE ACT; RISK ADJUSTMENT; STATE GOVERNMENT; UNITED STATES;

EID: 84858598976     PISSN: 02782715     EISSN: 15445208     Source Type: Journal    
DOI: 10.1377/hlthaff.2011.0420     Document Type: Article

References (22)

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2. Pauly MV. Is cream-skimming a problem for the competitive medical market? J Health Econ. 1984;3(1): 87-95.
3. The federal government will operate an exchange for any state that fails to do so, and states can arrange for joint state and federal operation of an exchange
4. "Grandfathered" health plans-those with enrollees who were in the plan as of March 23, 2010-are exempt from key regulations described in this article
5. Hall MA (Wake Forest University; Winston-Salem, NC). Risk adjustment under the Affordable Care Act: a guide for federal and state regulators [Internet]. New York (NY): Commonwealth Fund; 2011 May 10 [cited 2012 Jan 20]. (Issue Brief). Available from: http://www.commonwealthfund.org/~/media/ Files/Publications/Issue%20Brief/ 2011/May/1501_Hall_risk_ adjustment_ACA_guide_for_ regulators_ib_v2.pdf
6. To access the Appendix, click on the Appendix link in the box to the right of the article online
7. Total transitional reinsurance program assessments are projected to be $10 billion for 2014, $6 billion for 2015, and $4 billion for 2016. Additionally, the provision includes insurer assessments of $2 billion each for 2014 and 2015 and $1 billion for 2016, which are allocated directly to the US Treasury.
8. If a plan's total medical expenses are less than 97 percent of premiums collected, minus administrative costs, the plan must pay 50 percent of the excess premiums collected; if expenses are less than 92 percent of premiums minus costs, the plan must pay 80 percent of the excess beyond 92 percent. If a plan's expenses are more than 103 percent of premiums minus costs, the plan receives payments covering 50 percent of the excess expenses; if expenses are more than 108 percent of premiums minus costs, the plan receives percent of the excess above 108 percent.
9. We did not include geographic, family composition, or smokingstatus adjustments
10. IMS Health. Subset of the Patient-Centric Database containing a national cross-section of managed care plans [Internet]. Watertown (MA): IMS LifeLink Health Plan Claims Database; Payer Solutions; [cited 2012 Jan 31]. Available from: http:// www.imshealth.com
11. Johns Hopkins ACG System [home page on the Internet]. Baltimore (MD): Johns Hopkins University; [cited 2012 Jan 18]. Available from: http://www.acg.jhsph.org/
12. Department of Health and Human Services. Patient Protection and Affordable Care Act; standards related to reinsurance, risk corridors, and risk adjustment. Washington (DC): HHS; 2011 Jun 29. (Proposed Rule).
13. Centers for Medicare and Medicaid Services. Risk adjustment implementation issues. Baltimore (MD): CMS; 2011 Sep 12.
14. States can choose whether to treat the individual and small-group markets as one joint or two distinct risk pools for the purposes of risk adjustment. See footnote 1 in Risk Adjustment Implementation Issues (Note 13).
15. The department will administer the risk-adjustment methodology for all federally run exchanges
16. Pope GC, Kautter J, Ellis RP, Ash AS, Ayanian JZ, Iezzoni LI, et al. Risk adjustment of Medicare capitation payments using the CMS-HCC model. Health Care Financ Rev. 2004;25(4):119-41.
17. Winkelman R, Peper J, Holland P, Mehmud S, Woolman J (Wakely Consulting Group; Boston, MA). Analysis of HHS proposed rules on reinsurance, risk corridors, and risk adjustment [Internet]. Princeton (NJ): Robert Wood Johnson Foundation; 2011 Aug [revised 2011 Sep 1; cited 2012 Jan 12]. (Research Brief). Available from: http://www.rwjf.org/files/research/72682hhswakelystatenetwork201109.pdf
18. American Academy of Actuaries Risk Sharing Work Group. Letter to: Centers for Medicare and Medicaid Services on proposed rule on standards related to reinsurance, risk corridors, and risk adjustment. Washington (DC): The Academy; 2011 Oct 28.
19. Tucker A, Weiner J, Abrams C. Health-based risk adjustment: application to premium development and profiling. In: Wrightson CW, editor. Rate setting, risk adjustment, and financial strategies in managed care organizations. Ann Arbor (MI): Health Administration Press; 2002. p. 165-227.
20. Winkelman R, Damier R. Risk adjustment in state Medicaid programs. Health Watch. 2008;57:14-7.
21. Song Y, Skinner J, Bynum J, Sutherland J, Wennberg J, Fisher E. Regional variations in diagnostic practices. N Engl J Med. 2010; 363(1):45-53.
22. Zhao Y, Ellis RP, Ash AS, Calabrese D, Ayanian JZ, Slaughter JP, et al. Measuring population health risks using inpatient diagnoses and outpatient pharmacy data. Health Serv Res. 2001;36(6 Pt 2):180-93.