Where the money stands in ACA risk adjustment
The Trump administration's decision to suspend the Affordable Care Act's risk adjustment program, which transfers money among health insurers, could inevitably create winners and losers in the law's marketplace.
By the numbers: Nine health insurance companies, many of which are Blue Cross and Blue Shield affiliates, each are owed at least $100 million in risk adjustment payments from 2017. Five insurers each are supposed to pay at least $100 million into the program.
Winners: The companies reporting "payables" have to pay into risk adjustment, presumably because they had healthier ACA members. They would directly benefit if the 2017 risk adjustment transfers go away.
- No insurer had a larger ACA risk adjustment payable than Kaiser Permanente. It owes nearly $928 million. Molina Healthcare and Centene also owe huge sums ($853 million and $689 million, respectively).
Losers: The insurers reporting "receivables" are owed money from risk adjustment, presumably because they had sicker ACA members (or because they have more medical coding experience). They would eat major losses if the 2017 risk adjustment transfers don't happen.
- No insurer had a larger ACA risk adjustment receivable for 2017 than Blue Shield of California. It is owed $696 million. Not far behind are several other BCBS affiliates including Health Care Service Corp. ($640 million), BCBS of Florida ($618 million) and Anthem ($522 million).
Yes, but: The chart above represents cumulative numbers. Risk adjustment is conducted on a state-by-state basis, so payables/receivables matter a lot more for smaller insurers that don't have massive cash reserves.
- For example, Montana Health Cooperative, one of the ACA's few remaining not-for-profit co-op plans, is supposed to pay $36.6 million into risk adjustment. That doesn't crack the top 10 plans, but that represents a fifth of MHC's gross premiums for 2017.
The big picture: It is highly unlikely, though hypothetically possible, the government will kill the $10.4 billion in pending risk adjustment transfer amounts for 2017. But the timing of the freeze has puzzled analysts and raised questions of political motivations.