3 R’s of ObamaCare Risk Management

r'sThe Affordable Care Act incorporates three risk management programs to protect the assets of carrier’s who participate in the exchange’s and individual health insurance marketplace.  The program includes:

Reinsurance – Stop Loss Insurance: For 2014 the government (taxpayers) will reimburse carriers 80% of individual claim loss between $60,000 and $250,000

Risk Corridor: If a plan ends up with a surplus a formula is used to make payment to the federal government. If a plan ends up with a deficit, payment is received from other plans to offset the deficit.

Risk Adjustment: Higher risk plans will receive subsidies from lower risk plans