Group Representing Insurance Co-Ops Criticizes ACA Program

An organization representing state health insurance co-ops criticized the Affordable Care Act’s risk adjustment formula as a failure causing difficulties for the nonprofit insurers created under the law.

The announcement from the National Alliance of State Health Co-Ops came a day after HealthyCT, the Connecticut co-op, was put under an order of suspension, signaling the co-op would start taking steps to shut down. Kelly Crowe, the group’s CEO, said the case was not a “one-off example.”

“Choice and competition were promises made by the ACA. The landmark health law will fall far short of these goals if risk adjustment is allowed to continue in its current form,” she said in a statement. “Case in point: Connecticut will only have two insurers left on the marketplace following HealthyCT’s exit.”

The risk adjustment program is meant to ensure that insurers are following federal rules and not selecting customers based solely on risk. Insurers with higher risk pools, or more sick individuals, receive money which insurers with lower risk pools, or more healthy individuals, must pay into the pool.

Of the 23 co-ops that were created under the ACA, there are nine remaining.

“Unfortunately HealthyCT is not a one-off example, but rather a symptom of much larger problems with a program whose sole function is market stabilization,” Crowe said. “Despite a preponderance of evidence advanced by NASHCO and CHOICES, as well as pleas from numerous state officials, meaningful reforms to the risk adjustment program do not appear immediately forthcoming.”

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