Oliver Wyman April 11, 2024
Affordable Care Act individual market challenges
One of the biggest challenges for payers in the Affordable Care Act (ACA) individual market is managing a population’s risk scores relative to the population’s underlying morbidity. In the individual ACA market, payers are limited in the population risk factors for which they are allowed to price. At the state level, each ACA market has a risk adjustment program, where payers that have enrolled high risk members (but have been unable to sufficiently price for such members) get financial payments funded by payers that have enrolled low risk members (relative to the premiums they charged). This risk transfer can be a material component of the payer’s financial results each year (as an example, risk...
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