2024 Health Meeting VIRTUAL - Session 3C: ACA Risk Adjustment—State-level Issues and Solutions 7.24.24 Recording

After 10 years, the Affordable Care Act (ACA) risk adjustment program has evolved as the ACA has evolved. In recent years the Centers for Medicare and Medicaid Services (CMS) has focused on predictive accuracy over compensating for actuarial risk and has failed to address systemic issues such as insolvencies that created suboptimal outcomes for the ACA markets. This session will explore some of the current problems with how the risk adjustment program is functioning and discuss how actuaries can influence the direction of ACA risk adjustment by providing analysis and feedback to regulators as they develop programs to address these issues. Topics covered: Time value of risk adjustment transfers in a high-interest rate environment Interaction with state-level policies like 1332 waivers and rate review Incentives created by inaccurate risk transfers Opportunities to influence regulators to improve market outcomes.