Do the ACA’s risk adjustments penalize insurers?

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As insurers react to ongoing uncertainty about the Affordable Care Act (ACA), one of the issues they’re addressing are risk-adjustment payments. These payments, determined by the government’s Centers for Medicare & Medicaid Services (CMS), help compensate insurers for covering higher-risk patients.

The challenge, says actuary Gregory G. Fann, is ensuring that calculations from CMS remain fair to both large and small insurers, while protecting smaller companies from sudden insolvency. He contends that the current risk-adjustment models penalize the very types of insurers that the ACA needs to attract to strengthen the program. Read his full analysis in the article at The Actuary.

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