Opinion ID: 4468429
Heading Depth: 3
Heading Rank: 1

Heading: 2011 White Paper

Text: In the 2011 White Paper, CCIIO considered four alternatives to establish a “baseline premium” for the payment transfer formula: “weighted state average premiums,” “weighted rating area average premiums,” “actuarial value-adjusted 16 weighted average premiums,” and “plans’ own premiums.” 2011 White Paper at 14. 13 Because NMHC argued only in favor of using the plans’ own premiums, we focus on HHS’s choice to use the statewide average premium over the plans’ own premiums. CCIIO noted in the 2011 White Paper that using the statewide average premium “would result in balanced payments and charges” and “could be calculated with or without adjustment.” Id. It expressed concern that using the plans’ own premiums would “create disincentives” for some plans because “the amount of charges and payments would be affected by each plan’s premiums.” Id. It explained that “[f]or plans with a sicker than average risk mix, a lower premium plan would receive less in payments than a higher premium plan, even if the two plans have the same risk level.” Id. CCIIO feared this “could create disincentives for high-risk plans to operate efficiently or set lower prices.” Id. It also noted additional calculations would be needed for all options “except for the [s]tate average,” id. at 15, meaning that using the statewide average premium would automatically make transfers net to zero whereas using plans’ own premiums would require additional adjustments. 13 The parties included only an excerpt of the 2011 White Paper in their appendices. We consider the entire 2011 White Paper because the agency relied on it in promulgating its 2014 rule and it was included in the administrative record below. See Dist. Ct. Doc. 25, Ex. A at 2. 17 CCIIO sought comments on each of the four alternatives and whether it should consider other alternatives. See id. at 16-17. It also provided an appendix with “examples to examine implications of the approaches to calculate and balance payments and charges in greater detail.” Id. at 16, 29-56.