This paper analyzes how the final 2027 HHS-HCC ACA risk adjustment model changes affect issuer risk scores and risk transfer payments. Using benefit year 2025 data from Wakely’s National Risk Adjustment Reporting (WNRAR) project, the report estimates the financial impact of moving from the final 2025 HHS-HCC model to the final 2027 HHS-HCC model for Affordable Care Act individual and small group markets.
Key findings from the report
- Individual market absolute transfer dollars are estimated to decrease 2.0% under the final 2027 model.
- Small group market absolute transfer dollars are estimated to increase 0.1%.
- Most issuers’ relative risk moves closer to 1.0, reducing transfer magnitude.
- Demographic factors account for a larger share of total risk score under the final 2027 model.
- HCC, RXC, and ACF components contribute a smaller share of overall risk score.
- Changes vary significantly by issuer and market.
Estimates are based on benefit year 2025 enrollment, diagnosis, and claims data submitted through the Wakely National Risk Adjustment Reporting (WNRAR) project. Participating issuers were scored using the final 2025, final 2026, and final 2027 HHS-HCC risk adjustment models to estimate changes in risk scores and transfer payments.
This report provides one of the earliest actuarial analyses of the final 2027 HHS-HCC Risk Adjustment Model using actual benefit year 2025 issuer data. Health plans, actuaries, finance teams, and risk adjustment professionals can use these estimates to understand expected changes in risk scores, relative risk, and transfer payments as they prepare for the 2027 benefit year.
DOWNLOAD NOWWho should read this report
This report is intended for:
- ACA health plan actuaries
- Health insurance finance leaders
- Risk adjustment professionals
- Medicare and ACA consulting teams
- Health plan executives
- Provider-sponsored health plans
- ACA compliance teams
- State-based Marketplace participants
Key questions answered
- How does the final 2027 HHS HCC Risk Adjustment Model affect ACA issuer transfers?
- How do the 2025, 2026, and 2027 HHS-HCC models compare?
- How do demographic factors change under the 2027 model?
- How do HCC, RXC, and ACF components change?
- What happens to relative risk across issuers?
- What is the estimated impact on individual market risk transfers?
- What is the estimated impact on small group risk transfers?
Methodology
Estimates are based on benefit year 2025 enrollment, diagnosis, and claims data submitted through the Wakely National Risk Adjustment Reporting (WNRAR) project. Participating issuers were scored using the final 2025, final 2026, and final 2027 HHS-HCC risk adjustment models to estimate changes in risk scores and transfer payments.
