Payers owe a combined $11.2 billion in ACA risk-adjustment charges for 2025, CMS said at the end of June.
Risk adjustment transfers funds within a state’s individual or small group market from insurers whose members have lower risk to insurers whose members have higher-than-average risk, which discourages plans from avoiding sicker individuals. The $11.2 billion in charges was matched by another $11.2 billion in payments to insurers with higher-risk enrollees, for $22.3 billion in total gross transfers.
Blue Shield of California received about $1.4 billion in its home state, the largest individual market payment noted by CMS. Florida Blue followed at $1.3 billion for its individual business in Florida.
Six notes:
- A total of 557 plans participated in the risk adjustment program for 2025, down from 592 in 2024.
- Individual market enrollment grew 4.1% from 2024 to 2025, a steep decline from the 26.5% growth recorded the prior year.
- Individual plan premiums per member per month increased 3.6% last year, the largest increase since 2018. Small group premiums PMPM rose 7.4%.
- The percentage of individual enrollees with one or more chronic or serious health conditions rose to 23.4% in 2025 from 21.9% in 2024.
- CMS distributed $851 million to 261 individual market plans and $420 million to 171 small group plans under the high-cost risk pool, which reimburses 60% of an enrollee’s claims costs above $1 million. The pool’s charge rate was 0.47% of premium for the individual market and 0.62% for small group.
- New York and Oregon were the only states with individual enrollment drops, as both launched alternative coverage options in 2025. New York’s Essential Plan expansion grew 39% year over year, while Oregon’s new OHP Bridge program is estimated to have absorbed 31,000 to 35,000 enrollees previously on the exchange.
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