Federal regulators have revamped the tables commercial, individual and small-group health plans use to estimate how much covering sick enrollees will cost.
The Center for Consumer Information & Insurance Oversight published the new tables on the web earlier this week. The new tables give numbers that rate the estimated cost of covering most types of healthy people a little lower. The tables rate the estimated cost of covering many types of sick people much lower.
The risk factor for the costliest enrollees in the tables, severely ill, severely premature babies, will fall to 287.667 in 2018 for families with mid-level silver plan coverage, from 334.332 for 2017.
In a separate table for adults, which includes only risk factors for conditions, not condition severity, the highest risk factor is for adults with hemophilia. The risk factor for that condition will fall to 41.379 in 2018 for patients with silver plan coverage, from 45.940 for 2017.
Issuers of individual and small-group plans need the risk factor tables to participate in the Affordable Care Act risk-adjustment program. The program is supposed to protect plans from covering more than their fair share of sick enrollees. Program managers at CCIIO take cash from plans with low-risk enrollees and send the cash to plans with high-risk enrollees.
If the current U.S. health insurance system survives, the new risk factor tables could make covering healthy people more attractive in 2018, and covering sick people less attractive.
To participate in the ACA risk-adjustment program, the coverage issuers calculate risk scores for each patient.
One part of the risk score calculations relies on the CCIIO risk factor tables, or spreadsheets showing just how expensive covering many different types of people might be. The spreadsheets are the equivalent for a measuring tape for measuring the enrollees’ health risk.
CCIIO is part of the Centers for Medicare & Medicaid Services, the agency that runs Medicare.
CCIIO based on the ACA risk-adjustment program on an older Medicare Advantage risk-adjustment program.
The risk factor tables show that the lowest-risk enrollees tend to be healthy men, ages 21 through 24, who have catastrophic health coverage, or coverage that pays only about 50% of the actuarial value of what the federal government defines as basic health benefits.
The highest-risk enrollees are enrollees ages 60 to 64 with severe health problems and expensive platinum-level coverage.
CCIIO used Medicare data to develop the ACA risk-factor tables used in the past. Some insurers complained that those tables gave plans with many sick enrollees an unfair advantage over plans with many young, healthy enrollees.
CCIIO officials based the revised 2018 tables on commercial health plan enrollee data from MarketScan.
— Read MedPAC Measures Medicare Advantage Risk Score Inflation on ThinkAdvisor.