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CMS Marketplace Policy Changes Look to Strengthen the Risk Pool

October 19th, 2016

In response to insurance companies pulling out of Affordable Care Act (ACA) exchanges, CMS published policy changes to support the insurance companies who have concerns about high-cost enrollees and risk adjustment.

The policy changes are part of an effort to strengthen the risk pool, ACA Marketplace CEO Ken Counihan wrote in a CMS blog post. Proposed changes in the policy statement that are meant to help insurers deal with high-cost enrollees and risk adjustment include the following:

  1. The rule proposes a modification to risk adjustment regarding the cost of enrollees who do not stay with an issuer for the full plan year.
  2. The rule proposes using prescription drug utilization data as a source of information about the enrollee’s health and the severity of their conditions in an effort to mollify the financial risk associated with high dollar medications.
  3. The rule proposes modifying risk adjustment as to costs associated with the most expensive enrollees by having insurers share the costs of the highest cost covered enrollees.

Among the proposed changes meant to strength the Marketplace Risk Pool are the following:

  1. Continue to ensure the proper use of Special Enrollment Periods to allow people who lose coverage or experience other qualifying events an opportunity to enroll in the marketplace.
  2. Continue to encourage people who qualify for Medicare to move from the marketplace to Medicare, thereby reducing the risk profile of marketplace participants.
  3. Proposals to give issuers more flexibility in calculating their medical loss ratios, and to avoid instances where issuers who are adjusting individual market or group market portfolios would inadvertently trigger a ban on participating in the individual or group market.
  4. The proposed rule offers more flexibility for innovation around plan design by issuers, particularly around bronze plan offerings.

There is still uncertainty as to whether these proposals are strong enough to keep insurers in the marketplace or draw them back in. Next year, Aetna will offer individual insurance products in only four states, claiming it lost $200 million on its ACA exchange plans in the second quarter of 2016 with total losses of $430 billion since 2014. UnitedHealthcare will offer ACA plans in just three states next year.