New York state may create a program of its own to change the effects of the Affordable Care Act risk-adjustment program on its small-group health insurance market.
Maria Vullo, the state’s financial services superintendent, is getting ready to adopt an emergency regulation that would let the state Department of Financial Services set up a market stabilization pool for the small-group market for the plan year.
The department “is taking appropriate action to rectify certain unintended consequences of the federal risk-adjustment program and correct the current imbalance due to issues that are not accounted for in the federal program,” Vullo says in a statement about the emergency regulation.
The ACA risk-adjustment program is supposed to use cash from individual and small-group issuers with healthier-than-average enrollees to help issuers with sicker-than-average enrollees.
In New York state, the program has forced some insurers to transfer more than 30 percent of their premium revenue to competitors, officials say.
“These transfers are due to some factors that are not necessarily related to the relative health of each insurer’s members,” officials say. “In particular, the risk-adjustment program’s calculations include administrative expenses and profits rather than only using claims.”
Under current federal regulations and procedures, officials at the federal Centers for Medicare & Medicaid Services (CMS) expect to publish the risk-adjustment cash transfer amounts for the 2016 plan year in mid-2018.