The New Post-Reform Core Capability for Health Plans: Risk Adjustment

Medicare Advantage and Part D have for years been the world’s largest experiments in paying insurers more for the care of sick members while paying less for healthier members, or risk adjustment.  Some two dozen states now risk-adjust Medicaid payments to health plans, and the hundreds of Accountable Care Organizations (ACOs) launching this year and next are risk-adjusted as well.  Now that the election has been decided, we know that health plans operating in the insurance exchanges launching in 2014 will also be risk-adjusted based on a similar methodology to that used in MA and Part D.  It’s the new core capability for health insurers in the post-reform world, and it’s examined closely by my two top experts, Bill MacBain and Dr. Jack McCallum, in this month’s Managed Healthcare Executive magazine here.