Improving the Affordable Care Act Markets (Part 1)

By JONATHAN HALVORSON, PhD With each passing year, the Affordable Care Act becomes further entrenched in the American health care system. There are dreams on both the far left and far right to repeal and replace it with something they see as better, but the reality is that the ACA is a remarkable achievement which will likely outlast the political lifetimes of those opposing it. Future improvements are more likely to tweak the ACA than to start over from scratch. A critical part of making the ACA work is for it to support healthy, competitive and fair health insurance markets, since it relies on them to provide health care benefits and improve access to care. This is particularly true for insurance purchased by individuals and small employers, where the ACA’s mandates on benefits, premiums and market structure have the most impact. One policy affecting this dynamic that deserves closer attention is risk adjustment, which made real improvements in the fairness of these markets, but has come in for accusations that it has undermined competition. Risk adjustment in the ACA works by compensating plans with sicker than average members using payments from plans with healthier members. The goal is to remove an insurer’s ability to gain an unfair advantage by simply enrolling healthier people (who cost less). Risk adjustment leads insurers to focus on managing their members’ health and appropriate services, rather than on avoiding the unhealthy. The program has succee...
Source: The Health Care Blog - Category: Consumer Health News Authors: Tags: Health Policy Obamacare Affordable Care Act health reform Jonathan Halvorson Risk adjustment Source Type: blogs