July 1, 2016
WASHINGTON, DC – Kelly Crowe, CEO of the National Alliance of State Health CO-OPs (NASHCO), made the following statement regarding CMS’s release of risk adjustment transfers based on the 2015 benefit year. According to the data, the 10 remaining health insurance CO-OPs owe nearly $150 million in risk adjustment payments.
“Risk adjustment continues to be anything but a market-stabilizing program. The payments released yesterday once again punish many health CO-OPs – as well as other small, rapidly-growing, and innovative health plans – while rewarding many large and established health insurers. It’s difficult to believe this was the intended result when the so-called 3Rs were included in the Affordable Care Act. One thing remains abundantly clear: as currently designed, risk adjustment will only lead to reduced competition, higher premium rates, and deprive many Americans of the choices they desire in health insurance.
“CMS has pledged to take a closer look at the program to ensure its effectiveness. We continue to encourage the agency to listen to our concerns and act expediently to fix the very real flaws in the risk adjustment program.”
NASHCO is a member of CHOICES, a coalition of small and rapidly-growing health plans that believe the formula used to determine risk adjustment payments is fundamentally flawed. CHOICES released a white paper last November detailing problems with risk adjustment, primarily focused on the data used to determine transfers under the program.
Last month, Evergreen Health in Maryland filed a lawsuit against the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS), alleging that risk adjustment unfairly punishes companies like Evergreen.
Based in Washington, DC, the National Alliance of State Health CO-OPs is the trade association for non-profit health insurance CO-OPs. NASHCO was formed after the passage of the Affordable Care Act, and was designed to promote the development and success of health insurance CO-OPs. In the last five years, NASHCO has hosted multiple conferences to bring together those interested in the innovations and member governance models of CO-OPs, including health care policy experts, administration officials and congressional staff, health care industry professionals, and employer groups and consumer advocates. For more information, visit www.nashco.org.