BCBS Association: ACA risk adjustment is working

ACA marketplace risk adjustment payments are working as intended, an analysis from Oliver Wyman, commissioned by the Blue Cross Blue Shield Association, found. 

The report compared insurers' average claim costs to the risk adjustment payments it received, and found insurers with higher costs received more risk adjustment funds. 

The ACA risk adjustment system is designed to even out risk between insurers on the exchange, to ensure insurers are not incentivized to avoid enrolling higher-acuity members. 

Oliver Wyman researchers concluded the risk adjustment payment system does not disadvantage smaller insurers or new insurers entering the market, though the system does underpay for the highest-cost claims. 

Two high-profile insurers have left the ACA market in the past year, leaving risk-adjustment claims unpaid. According to CMS, Friday Health Plans, which was liquidated in all the states it operated in over the course of 2023, owes nearly $780 million in risk adjustment payments in seven states. 

Bright Health, which exited the exchange market at the end of 2022, has entered a repayment agreement with CMS for the $380 million in risk adjustment payments it owes. 

The report found that Bright Health and Friday Health Plans were often the lowest-cost option in the markets they operated in. 

"Bright and Friday clearly took aggressive pricing positions relative to other market competitors, and while we have not examined either companies' pricing directly, we think their aggressive pricing posture is a more likely source of their financial difficulties than the risk adjustment system," the analysts wrote. 

See the full report here. 

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Articles We Think You'll Like