Improving Risk Adjustment Methods May Create More Robust Health Insurance Exchanges

December 2, 2020

NIHCM Foundation: New Research Insights

When the Biden administration takes on the issue of health care in 2021, there will likely be a renewed interest in strengthening the Affordable Care Act’s health insurance exchanges. A new study conducted by Harvard professor Thomas G. McGuire, PhD, and his colleagues in the Netherlands and Germany reveals a need to fine-tune the current methods of adjusting payments to insurers so they more accurately reflect the risk represented by individual enrollees. Existing methods sometimes greatly underpay or overpay insurers, which may affect their willingness to participate in the exchanges.

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