CMS Proposes Rule to Provide $9.6 Billion in 2018 Risk Adjustment Transfers
The Centers for Medicare & Medicaid Services yesterday issued a that would maintain the current methodology for calculating risk adjustment transfers in the individual and small group health insurance markets for benefit year 2018. CMS expects the rule to provide $9.6 billion in risk adjustment transfers for benefit year 2018. The permanent risk adjustment program, created by the Affordable Care Act, transfers funds from health plans with lower-risk enrollees to plans with higher-risk enrollees to spread the financial risk and help stabilize premiums. In February, a federal district court in New Mexico invalidated CMS’s use of the statewide average premium in the transfer formula for the 2014-2018 benefit years, pending further explanation of the agency’s reasons for operating the program in a budget neutral manner. The proposed rule expands on the agency’s recent justification for using the statewide average premium and operating the program in a budget-neutral manner in the final rule for the 2017 benefit year. CMS will accept comments on the use of a statewide average premium through Sept. 7.