Some critics of the ACA's risk adjustment program--which was designed to redistribute money among health plans to protect those with the sickest customers--argue it's having an unintended "reverse Robin Hood" effect by taking money from small plans and paying out money to those at the top of the game.
A coalition of small insurers reports new health plans have proven especially vulnerable, noting for 2014, 27 of 35 new plans were required to pay the program, The Washington Post reports.
HHS officials refute the suggestion the program is biased against small plans, though possible changes are slated to be discussed in March, according to Kevin Counihan, director of HHS’s Center for Consumer Information and Insurance Oversight.
While the formula itself might not be biased against small insurers, some suggest that it still puts them at a disadvantage.
For example, risk levels may appear lower for insurers covering a large number of new members who don't obtain care right away and therefore have no medical diagnoses yet shown. In addition, smaller insurers may have been more impacted by a difficulty submitting data to HHS while lacking guidance from consultants.
“Risk adjustment is dark art,” Michael Adelberg, a former HHS official who worked with nonprofit health plans, told the Washington Post. “Some carriers brought only a knife to a gunfight."