When Aetna decided last week to drop 70% of its health plans in the Affordable Care Act markets, CEO Mark Bertolini publicly blamed the exits on the poor risk pool, as well as “the current inadequate risk-adjustment mechanism.”
The federal government's decision to block Aetna's acquisition of Humana also factored heavily into Aetna's exchange exodus, as Bertolini warned in a July letter that was obtained by the Huffington Post.
The risk pools and merger politics have captured the attention of policymakers, but the digs at the ACA's permanent risk-adjustment program also reveal a simmering area of universal discontent among insurers. Not-for-profit co-ops and other small health plans have been the leading critics of risk adjustment. Now, Aetna is right behind them.
Ana Gupte, an analyst at investment bank Leerink Partners, recently met with top Aetna executives and said they plan to lobby the federal government to alter the ACA's risk adjustment to more closely resemble what is used in Medicare Advantage, the private HMO version of traditional Medicare. Some people in Washington even think Congress may propose legislation to make that change.
But moving the ACA risk adjustment to a Medicare Advantage model would be incredibly difficult, mostly because it would require new taxpayer money for a politically contentious law.
That “seems like a big lift in the present legislative climate,” said Michael Adelberg, a former CMS official who now works at FaegreBD Consulting. Many experts and health plan executives believe CMS officials instead should continue making incremental changes to risk adjustment under their statutory authority.
The two risk-adjustment systems work in very different ways but are both intended to reduce the incentive for insurers to cherry-pick the healthiest members. Under the ACA, insurers peg their members with risk scores based on the services and conditions that are coded in hospitals and doctor offices. Plans that have healthier people with lower risk scores pay into a pool in each state, and plans with sicker members get to take money—giving the program a zero-sum outcome.