Review of Proposed 2019 Risk Adjustment Changes For State Flexibility

HHS reduced the statewide average premium in the 2018 Affordable Care Act (ACA) risk adjustment formula by 14% across all states. In HHS’ Notice of Benefit and Payment Parameters (NBPP) for 2019, HHS proposes that State insurance regulators may request up to a 50% further reduction in the premium used in the risk adjustment transfer calculation for the small group market.

This paper discusses the impact of the proposed 2018 change, and the potential impact of states choosing to further reduce risk adjustment premiums starting in 2019.

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