State Flexibility in Risk Adjustment Under the Affordable Care Act

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<p>Along with a proposed regulation on state health insurance exchanges, the U.S. Department of Health and Humans Services (HHS) also recently released a companion set of proposed rules governing risk adjustment, reinsurance, and risk corridors. In a <a href="/blog/2011/state-flexibility-risk-adjustment-under-affordable-care-act">new blog post</a>, Mark Hall of Wake Forest University looks at risk adjustment, a necessity for ensuring a level playing field in individual and small-group markets both within and outside the exchanges. </p>
<p>The Affordable Care Act requires health insurers to accept all applicants and prevents them from varying premium rates based on health status. That's why risk adjustment is so crucial: by requiring insurers with a lower risk profile to subsidize those with a higher risk profile, there won't be incentives for health plans to adopt indirect or covert forms of risk avoidance. </p>
<p>In his blog post, Hall discusses what the rule says about the risk adjustment method and administration choices states have, as well as how the states and HHS will collect and use the clinical data needed for the risk adjustment calculations. Visit <a href="~/link.aspx?_id=0B67ACA7A5CB453CB876F3DB59E19448&_z=z">The Commonwealth Fund Blog</a> to learn more. <br /></p>