ACA Insurance and Risk Adjustment Payments: What You Need to Know
The Centers for Medicare & Medicaid Services (CMS) recently announced a freeze on risk adjustment payments for individual health insurance plans in Tennessee. This has caused uncertainty in the individual market for 2019, just as the market was stabilizing.
What are risk adjustment payments?
Risk adjustment payments are made to health insurance plans to compensate them for the higher costs of covering sicker patients. These payments are based on a formula that takes into account the age, sex, and health status of the plan’s enrollees.
Why did CMS freeze risk adjustment payments?
CMS froze risk adjustment payments in Tennessee because it believes that the current formula is not accurate. The agency is concerned that the formula is overpaying some plans and underpaying others.
What does the freeze mean for consumers?
The freeze on risk adjustment payments could lead to higher premiums for individual health insurance plans in Tennessee. This is because plans will need to make up for the lost revenue from CMS.
What can consumers do?
Consumers who are concerned about the impact of the freeze on risk adjustment payments should shop around for health insurance plans and compare prices. They should also consider contacting a licensed insurance agent to get help finding a plan that meets their needs.
Conclusion
The freeze on risk adjustment payments is a significant development for the individual health insurance market in Tennessee. Consumers should be aware of the potential impact of the freeze and take steps to protect themselves from higher premiums.
Call to action
If you are concerned about the impact of the freeze on risk adjustment payments, please contact a licensed insurance agent for help. They can help you find a plan that meets your needs and budget.
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