Aspects of the ACA Marketplace

Tim Jost’s article introduces the web-exclusive series on various topics surrounding the Affordable Care Act (ACA). The articles dive deeper and highlight several viewpoints from actuaries and other policy experts on the most important aspects of the ACA marketplace. These opinions are particularly unique because the authors come from many different organizations and have had many different experiences with the ACA, including those with co-ops, blues plans, consulting firms, smaller health plans and large national payers.

Authors and topics include:

• Kurt J. Wrobel, FSA, MAAA
  A Review of Emerging Data: The Long-Term Sustainability Question for the ACA Marketplace
• Timothy Stoltzfus Jost, JD
  Stabilizing Forces: The Difference Premium Stabilization Programs Make in the Affordable Care Act Marketplaces and Medicare Part D
• Scott Brockman, ASA, MAAA
  Transfer Problems: Exploring the Imbalance in the ACA’s Risk Adjustment Transfer Formula
• Roy Goldman, Ph.D., FSA, CERA, MAAA
  Five Areas of Concern: Comments on Risk Adjustment Under the ACA
• Andrea B. Christopherson, FSA, MAAA
  Market Dynamics Under ACA Risk Adjustment: Looking for Solutions to Maintain the Viability of the Overall Risk Pool
• Gregory Gierer
  The ACA Risk Adjustment Program: A Critical Element in Assuring Market Stability and Affordability
• Kristi M. Bohn, FSA, MAAA
  Financial Fairness: Looking for Ways to Level the Playing Field Among Health Insurance Carriers Under the ACA
• Victor Davis, FSA, MAAA
  Toward Sustainable ACA Markets: Overcoming the Challenges Caused by Risk Adjustment

To provide an analytical grounding for the articles, Rebecca Owen, FSA, MAAA, health research actuary for the Society of Actuaries, begins by offering a general background on the most important emerging risk adjustment information released by the Centers for Medicare & Medicaid Services (CMS). This information is particularly important because it starts to highlight the successes, as well as the most important challenges, in ensuring the long-term sustainability of the program.

With Owen’s research report—“An Examination of Relative Risk in the ACA Individual Market” as background—several of the authors highlight the long-term challenges with the program, including the stability of the risk pool, the magnitude and timing of the risk adjustment payment, and the problem of member turnover. While each author approaches these issues with a different perspective, each article has themes with a similar underlying current that tie back to the program’s high-level challenges.

In addition, several authors detail specific technical facets of the risk adjustment program. The technical aspects of the program are very important, particularly because risk adjustment will be the sole remaining risk protection in the program beginning in 2017. Many authors see opportunities to improve the program—including better accounting for partial year enrollees, the inclusion of pharmacy data adjusting for premium differences for lower-cost plans and using credibility for smaller insurance companies.

Overall, the authors highlight the many challenges we face as we continue to make improvements in the program. These improvements are an important part of ensuring that we have a sustainable program that provides stable premiums for the members of the ACA marketplace.