An Examination of Relative Risk in the ACA Individual Market

On June 30, 2016, the Center for Consumer Information and Insurance Oversight (CCIIO) released information detailing the reinsurance payments and risk adjustment transfers for the issuers that participated in the individual and small group Affordable Care Act (ACA) markets in 2015. This publication examines this document, and the data it presents, in an effort to glean information about the relative risk of the individual markets. This is an observational study, not intended to hazard opinion on the future characteristics of the risk pool.

This analysis of the report presents four main conclusions:

Risk measures published in the CCIIO release show that the average measure of risk increased from 2014 to 2015. Increased risk scores may be a combination of identification through better coding as well as a measure of the actual population health.

Some states and issuers had significant swings in average risk measures, in both direction and magnitude.

State variability due to underlying market characteristics means that national summary risk measures do not adequately represent the experience.

The program is still too immature to draw conclusive inferences about the future of the pool or marketplaces.

This paper is being produced in conjunction with eight companion pieces written by experts who reflect a variety of stakeholder experiences with the development of the risk pool. The SOA has also produced a research paper that looks at the small group results.

The material was authored by Rebecca Owen, FSA, MAAA, SOA Health Research Actuary. If you have comments or questions, please email   


An Examination of Relative Risk in the ACA Individual Market

Thank You

The SOA would like to thank Susan Pantely, FSA, MAAA, Milliman, Hans Leida, PhD, FSA, MAAA, Milliman , Kurt Wrobel, FSA, MAAA, Geisinger Health Plan, Karan Rustagi, ASA, MAAA, Wakely Consulting Group, Geof Hileman, FSA, MAAA, Kennel and Associates and  Elaine Corrough, FSA, MAAA, Axene Health Partners for their insight and guidance.