Health insurers in the individual and small-group commercial major medical market are starting to learn how to cope with the Affordable Care Act risk-adjustment program.

For 2014, the program shifted amounts equal to about 10 percent of individual major medical premiums and 6 percent of all small-group premiums from issuers with what look, on paper, like low-risk enrollees to issuers with enrollees with high risk scores.

The percentages for 2015 will probably similar, program managers at the Centers for Medicare & Medicaid Services said in a report on health insurers’ estimated ACA reinsurance receivables and A risk-adjustment transfer amounts for 2015 that was released June 30.

Related: Top 10 ACA reinsurance magents

For Congress, putting a health insurance risk-adjustment program in the legislation that created the Patient Protection and Affordable Care Act of 2010 was a no-brainer.

CMS was already using a risk-adjustment program to help Medicare Advantage plan issuers offer coverage on a guaranteed-issue basis, and cope with the tendency of sicker patients to flow into certain plans.

Issuers in both the Medicare Advantage risk-adjustment program and the Affordable Care Act risk-adjustment program gather information on enrollees’ health. Program managers then decide which issuers have accumulated more than their fair share of risk and shift the extra risk to plans with low risk scores.

But the ACA risk-adjustment program is different in an important way: CMS is supposed to pull cash directly from some insurers and push it to others.

In the Medicare Advantage risk-adjustment program, CMS acts as the risk-adjustment engine, by changing how much cash it sends plan issuers. There, issuers need not send cash directly to competitors, or worry about whether competitors will pay their risk-adjustment bills.

When insurers are dealing with the ACA risk-adjustment program, the amount of cash they get may ultimately depend on whether competitors make good on risk-adjustment obligations. The adjustment formula is complicated, and smaller, newer plans have argued that the current systems is biased against smaller, newer plans that have less information about their enrollees.

Related: Small health plans: ACA program may kill us

Insurers can appeal the preliminary risk-adjustment bills given in the June 30 report.

For a look at the 10 plans with the biggest preliminary individual market risk-adjustment bills listed in that report, read on:

Trees are tougher in Arizona. (Photo: Thinkstock)

Trees are tougher in Arizona. (Photo: Thinkstock)

10. Meritus Health Partners

Tempe, Arizona.

Risk-adjustment bill: $48,452,998.55.

Related: CMS hopes for cash from failed CO-OPs’ vendors 

Managing risk in and around New York City is not always easy. (Photo: Allison Bell/LHP)

Managing risk in and around New York City is not always easy. (Photo: Allison Bell/LHP)

9. Healthfirst PHSP

New York.

Risk-adjustment bill: $48,556,174.15.

Related: Tech companies offer to save health insurers from ACA despair 

Fidelis serves many Medicaid plan enrollees in the New York City area. (Photo: Allison Bell/LHP)

Fidelis serves many Medicaid plan enrollees in the New York City area. (Photo: Allison Bell/LHP)

8. New York State Catholic Health Plan (Fidelis)

Rego Park, New York.

Risk-adjustment bill: $56,655,138.64.

Related: UnitedHealth Says N.Y. PPACA risk-adjustment program could be in trouble 

Several insurers complained about health claim patterns in Georgia. (Image: Thinkstock)

Several insurers complained about health claim patterns in Georgia. (Image: Thinkstock)

7. Coventry Health Care of Georgia Inc.

Hartford, Connecticut.

Parent: Aetna.

Risk-adjustment bill: $58,546,619.35.

Related: What is PPACA World like? Anthem and Humana open up

 

Florida has sent HealthCare.gov more enrollees than any other state. (Photo: Allison Bell/LHP)

Florida has sent HealthCare.gov more enrollees than any other state. (Photo: Allison Bell/LHP)

6. Preferred Medical Plan (Florida)

Long Beach, California.

Parent: Molina Healthcare.

Risk-adjustment bill: $62,496,825.44.

Related: CMS schedules PPACA risk-adjustment clash 

Horizon's service area includes both big cities and rural areas, such as the area around Sparta. (Photo: Allison Bell/LHP)Horizon’s service area includes both big cities and rural areas, such as the area around Sparta. (Photo: Allison Bell/LHP)

 

5. Horizon Healthcare Services

Newark, New Jersey.

Risk-adjustment bill: $62,892,998.27.

Related: UnitedHealth leaves New Jersey’s PPACA exchange

Kaiser has been a major player on California's Covered California exchange. (Image: Covered California)

Kaiser has been a major player on California’s Covered California exchange. (Image: Covered California)

4. Kaiser Foundation Health Plan

Oakland, California.

Risk-adjustment bill: $82,078,859.73.

Related: California exchange board OKs agent comp standards

Dave Jones seemed eager to approve Centene's acquisition of Health Net earlier this year. (Photo: Rich Pedroncelli/AP)

Dave Jones approved Centene’s acquisition of Health Net earlier this year. (Photo: Rich Pedroncelli/AP)

3. Health Net of California

St. Louis.

Parent: Centene Corp.

Risk-adjustment bill: $125,635,855.94.

Related: What if you owe the PPACA 3R’s programs money?   

Health risk may have flowed unevenly in Kentucky communities like Louisville. (Photo: Thinkstock)

Health risk may have flowed unevenly in Kentucky communities like Louisville. (Photo: Thinkstock)

 

2. Humana Medical Plan

Louisville, Kentucky.

Risk-adjustment bill: $135,056,370.83.

Related: Humana to leave Alabama, Virginia exchanges in 2017 

Image: Thinkstock

(Image: Thinkstock)

1. Molina Healthcare of Florida

Long Beach, California.

Parent: Molina Healthcare.

Risk-adjustment bill: $218,903,904.11.

The parent company knew a big risk-adjustment bill was coming: S&P analysts say the total ACA risk-adjustment payable for all Molina plans included in the June 30 report was only about $40 million higher than what the company had estimated earlier.

Related:

CMS: We’ll give issuers some 2015 risk numbers in March

PPACA reinsurance total may be 19% below goal

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