CMS Proposal of Reinsurance for Risk Adjustment May Do More Harm Than Good

The Centers for Medicare & Medicaid Services (‘‘CMS’’) has proposed changes to the risk adjustment program—the permanent premium stabilization program under the Affordable Care Act (the ‘‘ACA’’)—for the 2018 benefit year. The risk adjustment program transfers funds from plans with healthy enrollees to plans with relatively sick enrollees. This mitigates the harm of ‘‘adverse selection’’ by compensating an insurer who is selected by enrollees with chronic conditions.

Click to read the full Bloomberg BNA article.