MA’s ACA-Required Risk Adjustment Process Results Are In

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Friday, July 01, 2016

GoLocalWorcester News Team

Massachusetts completed the second yearly Risk Adjustment process on Thursday, notifying carriers in the state merged health care market of individuals and small groups of the results.

Through this year's process, carriers will transfer about $85.7 million, which includes approximately $1 million to Harvard Pilgrim Health Care, Inc. after reconsideration of the carrier's Plan Year 2014 results.

The transfer amount is larger than last year's $61 million due to an increase in Risk Adjustment covered member months, growing from 4.3 million in Plan Year 2014 to 8.4 million in Plan Year 2015.

For 2015, all members in the merged market were in a Risk Adjustment covered plan and part of the Risk Adjustment formula for the entire year.

Here are the results:

Risk Adjustment

Risk Adjustment is a mechanism created to prevent denial of coverage and higher premium charges to people with pre-existing conditions. Risk Adjustment is intended to balance out the risk-or cost-of insuring less healthy people, and maintain an open market for consumers. The process includes the 16 issuers and 735,000 people who are in the state's merged market.

The Process

The Risk Adjustment process is currently run by the Commonwealth, through the Massachusetts Health Connector, using data supplied to the Center for Health Information and Analysis by carriers.

The data is analyzed by Milliman, a technical consultant contracted by the Commonwealth.

The results are based on a formula created in conjunction with the carriers and which was approved by the federal Medicare and Medicaid Services in March of 2013.

Massachusetts will operate similarly in 2017, for plan year 2016, and starting in 2018 the Risk Adjustment process will be taken care of by the federal government for Plan Year 2017.