HealthyCT crum­bles un­der ACA risk-ad­just­ment charge

Modern Healthcare - - REGIONAL NEWS - —Erica Te­ichert

Con­necti­cut’s co-op in­surer HealthyCT is wind­ing down its busi­ness af­ter it was hit with a mas­sive Af­ford­able Care Act risk-ad­just­ment charge, as the state’s in­sur­ance reg­u­la­tor said the plan was fi­nan­cially un­sta­ble be­cause of the re­quired pay­ments.

The Con­necti­cut In­sur­ance De­part­ment placed HealthyCT un­der an or­der of su­per­vi­sion last week, pre­vent­ing the in­surer from writ­ing new busi­ness or re­new­ing poli­cies. It pro- vides in­sur­ance for 40,000 peo­ple in the state, with 13,000 on in­di­vid­ual plans and 27,000 on em­ployer plans.

The move comes less than a week af­ter the CMS said HealthyCT owed $13.4 mil­lion in risk-ad­just­ment obli­ga­tions. The CMS’ per­ma­nent risk-ad­just­ment pro­gram is sup­posed to spread in­sur­ance risk among all ACA in­sur­ers and pre­vent com­pa­nies from cov­er­ing only the health­i­est mem­bers.

“It be­came ev­i­dent that this risk-ad­just­ment man­date would put the com­pany un­der sig­nif­i­cant fi­nan­cial strain,” said Katharine Wade, the state’s in­sur­ance com­mis­sioner. “This or­der of su­per­vi­sion pro­vides for an or­derly runoff of the com­pany’s claim payment un­der close reg­u­la­tory over­sight.”

Some com­pa­nies have voiced con­cerns that the risk-ad­just­ment model fa­vors larger in­sur­ers, and smaller plans are dis­ad­van­taged be­cause their mem­ber­ship bases look health­ier due to a lack of claims data.

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