Three PPACA programs are supposed to protect health insurers against big, unexpected shifts in risk. (AP photo/Rick Bowmer)

State insurance regulators are thinking about what health insurers ought to tell them about their interactions with the new Patient Protection and Affordable Care Act (PPACA) risk-management programs. 

The Statutory Accounting Principles Working Group, part of the National Association of Insurance Commissioners (NAIC), talks about risk program disclosure rules in a new draft paper posted on the group’s section of the NAIC website.

PPACA calls for health insurers to help pay for a temporary reinsurance program, a temporary risk corridor program and a permanent risk-adjustment program.

The “3 R’s” programs are supposed to protect health insurers against any big swings in risk that occur because of PPACA.

The NAIC already has a collection of guidance, Statement of Statutory Accounting Principles Number 35R, that helps insurers report on participation in existing state and federal risk-management programs in their financial statement.

At the end of the new draft paper, the statutory accounting working group shows proposed 3 R’s disclosure guidelines.

To report on reinsurance program participation, for example, a health insurer would have to add nine new pieces of data to its financial statements. It would have to report items such as the amounts recoverable for claims, amounts receivable relating to uninsured plans, claims unpaid that have been ceded, contributions payable but not reported as ceded premium, and reinsurance recoveries.

For the permanent risk-adjustment program — which would use risk scores to help provide subsidies for high-risk enrollees while the plan year was under way — an insurer would have to report five extra items, including premium adjustments receivable, risk-adjustment user fees payable and risk-adjustment user fees.

The working group says it may decide it needs to start a broader project to develop new accounting and reporting guidance for the 3 R’s programs.

“Changes determined might end up being substantive or nonsubstantive, depending on the deliberations,” the group says in the paper.

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