CHA News Article

Report Examines ACA Transitional Reinsurance, Permanent Risk Adjustment Programs
Covers 2016 benefit year

The Centers for Medicare & Medicaid Services (CMS) has released a report summarizing transitional reinsurance payments and permanent risk adjustment transfers for the 2016 benefit year. Under the Affordable Care Act (ACA), the reinsurance program provides payments to issuers of non-grandfathered, individual market plans. During the year analyzed, California insurers received a total of $573,924,373 in reinsurance payments. According to the report, 496 issuers participated in the reinsurance program, all of which successfully submitted data necessary to calculate reinsurance payments. The risk adjustment program, which applies to any health insurance issuer offering non-grandfathered plans in the individual or small group market, had 751 participants. Of those, 710 submitted necessary data; risk adjustment charges were assessed to one issuer for failing to provide access to data and to an additional 41 for not submitting data. For the 2016 benefit year, an estimated $4 billion in reinsurance payments will be made to 496 issuers nationwide. According to the report, both the transitional reinsurance program and the permanent risk adjustment program are working as intended in compensating plans that enrolled higher-risk individuals.