Total risk adjustment payments in individual and small group insurance plans decreased slightly in 2023, according to new data from CMS.
The agency redistributed $10.3 billion in payments between insurers participating in the program in 2023, up from $9.24 billion in 2022, according to a CMS report published July 22. Though the overall value of payments increased, risk adjustment charges as a share of premiums decreased slightly from last year.
The risk adjustment program is designed to even out financial risk between payers with higher and lower-risk enrollees in each market.
In 2023, risk adjustment payments were 10.3% of premiums, down from 10.4% in 2022. Fewer plans participated in the risk adjustment program in 2023 than in the previous year, according to CMS.
The overall risk pool changed in 2023, CMS said, driven by insurer market expansions, and special enrollment periods, which could have attracted healthier enrollees. Fewer enrollees had higher-risk diagnoses in 2023 than in 2022, but per-member per-month costs rose in 2023.
Increased costs may be attributed to rising healthcare prices, CMS said, or overutilization of services.