The ObamaCare “risk adjustment” program was designed to support health plans with lots of sick, expensive customers by giving them money from plans with healthier customers. The goal is to help keep insurance markets stable by sharing the “risk” of sicker people and removing any incentive for plans to avoid individuals who need more medical care. Such stability is likely to encourage competition and keep overall prices lower for consumers, while its absence can undermine both and limit coverage choices—the basic principles of the law.
Yet the way the Obama administration has carried out this strategy shows another unexpected consequence of the 2010 health care law. Critics say the risk adjustment program is having a reverse Robin Hood effect—taking money from some plans that are small, innovative or fast-growing, while handing windfalls to some of the industry’s most entrenched players.
In his final State of the Union address, President Obama spent little time discussing health care programs. In sum, the president made one generic reference to Medicare, made no mention of Medicaid, and spent only about 30 seconds discussing his signature health care legislation—the Affordable Care Act—recapping its main purpose and making three claims about how it is performing.
The president claimed that the purpose of the ACA Is to ensure portability of coverage, that health care inflation has slowed, and that nearly 18 million people have gained coverage so far. He also claimed that businesses have created jobs every single month since the ACA became law. He failed to mention the nation’s greatest fiscal challenge: the unsustainability of entitlement programs.
This piece by Brian Blase aims to fill in some of the gaps.
Last week, the Department of Health and Human Services (HHS) released 2016 exchange enrollment data through the first two months of the three-month open enrollment period. Although nearly one month of open enrollment remains, the new data generally supports my previous findings. Here are seven things you should know about the new data.
1) 2016 enrollment will likely be at least ten million people below expectations when the ACA was passed
2) People with at least middle class income still largely shunning exchanges
3) Enrollees still skewing older
4) Average advance premium tax credit up 12% from last year
5) 90% of enrollees selected silver or bronze plans
6) 27% of enrollees are new sign-ups, 38% of enrollees are active reenrollees, and 33% of enrollees are automatic reenrollees
7) High auto-enrollment in states not using HealthCare.gov may lead to premium shock