Secs. 1341-1343. Transitional reinsurance program for individual and small group markets in each State. Risk Adjustment. tag:blog.lib.umn.edu,2010-03-10:/kelle528/myblog//11992 2010-03-10T12:34:50Z Sec 1341 of the Health Care Reform Bill 3590 requires transitional and reinsurance programs for individual and small group markets in each state. States are required to create a nonprofit reinsurance entity that will not only collect payments from insurers in the individual and group markets, but also cover high risk individuals. The secretary will be required to establish Federal standards for the determination of high-risk individuals, a formula for payment amounts, and the contributions required for insurers. These contributions must total $25 billion over the years; 2014, 2015, 2016. Sec. 1342 involves the establishment of risk corridors for plans in individual and small group markets. Here the Secretary is required to create risk corridors for qualified health plans also in the years; 2014, 1015, and 2016. If a plan’s costs were to exceed 103% of the total premiums the secretary would have to make payments to the plan to defray the excess. These costs do not include administrative costs. So, if the plan’s costs (other than administrative) are less than 97% of the total premiums, the plan makes payments to the Secretary. Sec. 1343 involves risk adjustment. States are required to assess charges on health plans with enrollees of lower-than-average risk. The states are also to provide payments to health plans with enrollees of higher-than-average risk. This risk adjustment only applies to plans in the individual and small markets. The risk adjustment does not apply to grandfathered plans. Risk adjustment is an important piece to any managed competition health care system. One great thing risk adjustments do is force insurers to compete on quality. These transitional programs described above that include risk adjustment, reinsurance, and risk corridors may help avoid organizations signing up or dropping sicker customers. These sections are almost designed to predict health care costs. Risk adjustment creates equilibrium for all companies by redistributing funds from all the plans to in return avoid one single company for getting high amounts of money simply because they only took in for example the young and healthy. I think the risk adjustment strategy described in this bill is a good idea to create this equilibrium of distribution of funds. When talking about risk adjustment we wonder how adverse selection is going to be stopped. The consequences would be high risk patients or the low income patients being turned away. These transitional reinsurance programs discussed in theses few sections of the bill is a step to improving that issue. We need to reduce adverse selection and these sections of the bill are a step in that direction. Melissa Kelley Sources: http://www.opencongress.org/ Movable Type Enterprise 4.25 Sec. 1341-1343 Transitional reinsurance program for individual and small group markets in each state. Risk adjustment tag:blog.lib.umn.edu,2010:/kelle528/myblog//11992.223719 2010-03-10T12:30:56Z 2010-03-10T12:34:50Z Sec 1341 of the Health Care Reform Bill 3590 requires transitional and reinsurance programs for individual and small group markets in each state. States are required to create a nonprofit reinsurance entity that will not only collect payments from... kelle528
Sec 1341 of the Health Care Reform Bill 3590 requires transitional and reinsurance programs for individual and small group markets in each state. States are required to create a nonprofit reinsurance entity that will not only collect payments from insurers in the individual and group markets, but also cover high risk individuals. The secretary will be required to establish Federal standards for the determination of high-risk individuals, a formula for payment amounts, and the contributions required for insurers. These contributions must total $25 billion over the years; 2014, 2015, 2016.

Sec. 1342 involves the establishment of risk corridors for plans in individual and small group markets. Here the Secretary is required to create risk corridors for qualified health plans also in the years; 2014, 1015, and 2016. If a plan's costs were to exceed 103% of the total premiums the secretary would have to make payments to the plan to defray the excess. These costs do not include administrative costs. So, if the plan's costs (other than administrative) are less than 97% of the total premiums, the plan makes payments to the Secretary.

Sec. 1343 involves risk adjustment. States are required to assess charges on health plans with enrollees of lower-than-average risk. The states are also to provide payments to health plans with enrollees of higher-than-average risk. This risk adjustment only applies to plans in the individual and small markets. The risk adjustment does not apply to grandfathered plans.

Risk adjustment is an important piece to any managed competition health care system. One great thing risk adjustments do is force insurers to compete on quality. These transitional programs described above that include risk adjustment, reinsurance, and risk corridors may help avoid organizations signing up or dropping sicker customers. These sections are almost designed to predict health care costs. Risk adjustment creates equilibrium for all companies by redistributing funds from all the plans to in return avoid one single company for getting high amounts of money simply because they only took in for example the young and healthy. I think the risk adjustment strategy described in this bill is a good idea to create this equilibrium of distribution of funds. When talking about risk adjustment we wonder how adverse selection is going to be stopped. The consequences would be high risk patients or the low income patients being turned away. These transitional reinsurance programs discussed in theses few sections of the bill is a step to improving that issue. We need to reduce adverse selection and these sections of the bill are a step in that direction.

Melissa Kelley


Sources: http://www.opencongress.org/

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