New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter XIV - Individual And Small Group Health Insurance › Part 361 - Establishment And Operation Of Market Stabilization Mechanisms For Individual And Small Group Health Insurance And Medicare Supplement Insurance › Section 361.9 - Market stabilization pools for the small group health insurance market for the 2017 plan year

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
(1) The superintendent has been assessing the
				federal risk adjustment program developed under the federal Affordable Care Act
				and its impact on the health insurance market in this State. In its simplest
				terms, the federal risk adjustment program requires that carriers whose
				insureds or members have relatively better loss experience pay into the risk
				adjustment pool and those with relatively worse experience receive payment from
				that pool. The broad purpose of the risk adjustment program is to balance out
				the experience of all carriers.
(2)
				In certain respects, however, the calculations for the federal risk adjustment
				program do not take into account certain factors, resulting in unintended
				consequences. The department has been working cooperatively with the Department
				of Health and Human Services and the Centers for Medicare and Medicaid Services
				(CMS) on risk adjustment. Recently, CMS has announced certain changes to the
				methodology. CMS has also stated that it will continue to review the
				methodology in the future.
(3) The
				federal risk adjustment program has led to a situation in which some carriers
				in this State are receiving large payments out of the risk adjustment program
				that are paid by other carriers. For many of these other carriers, the millions
				to be paid represent a significant portion of their revenue. The money
				transfers among carriers in this State under the federal risk adjustment
				program have been among the largest in the nation.
(4) CMS's changes and planned reviews are
				much appreciated and anticipated. The superintendent will continue to work with
				CMS and hopes that over time the federal risk adjustment program will be
				improved so that it fully meets its intended purposes. The federal risk
				adjustment methodology as applied in this State does not yet adequately address
				the impact of administrative costs and profit of the carriers and how this
				State counts children in certain calculations. These two factors are
				identifiable, quantifiable and remediable for the 2017 plan year.
(5) This section applies only to risk
				adjustment experience in the small group health insurance market for the 2017
				plan year to be applied to payments and receipts in 2018. The department will
				continue its review of the federal risk adjustment program and its impact on
				the individual and small group health insurance markets in this State. Among
				other issues, the department will continue to examine whether federal risk
				adjustment adequately accounts for demographic regional diversity in this
				State, as well as whether federal risk adjustment dissuades carriers from using
				networks and plan designs that seek to integrate care and deliver value. The
				superintendent will take all necessary and appropriate action to address the
				impact on both markets in the future.