Health Reform: Implementing Policy Risk Adjustment in the New York Context

Grantee Name

Wakely Consulting Group

Funding Area

Expanding Health Care Coverage

Publication Date

November 2013

Grant Amount

$15,000

Grant Date:

November 29, 2011 – September 7, 2012

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The Affordable Care Act (ACA) establishes a risk adjustment program to mitigate the potential consequences of adverse selection, which occurs when certain health plans attract a disproportionate share of sicker and more expensive patients.

Risk adjustment is a critical tool to correct market imbalances and stabilize insurance markets. Under the ACA, states are given significant flexibility in the design and implementation of risk adjustment methodologies. Therefore, this project aimed to identify the best approach for New York State by engaging stakeholders in the development of risk adjustment plans.

NYHealth leveraged an existing grant with The Robert Wood Johnson Foundation to provide technical assistance for the development of New York’s risk adjustment approach by awarding a $15,000 grant to Wakely Consulting Group. Additionally, the grant supported a stakeholder engagement process to elicit candid insights from health plans representatives and other stakeholders, leading to practical solutions for New York.

Outcomes and Lessons Learned

Produced a report, “Risk Adjustment and Reinsurance under the ACA – New York State Recommendations,” based on the stakeholder outreach efforts, phone calls, and other meetings with State personnel. The report provided recommendations for New York’s approach to address requirements and implement programs.
Gained a deeper understanding of the existing risk mitigation programs and the reasons why these programs are not feasible replacements to the ACA programs.

The work conducted during this grant period also informed Wakely’s future work and analysis, including final decision of the risk adjustment approach and its design, as well risk adjustment and reinsurance simulations. Simulations informed detailed technical design decisions and provided information to health plans to appropriately price their products in 2014 and correct any data issues. In addition, this project prompted further engagement of health plans in these programs and enabled them to provide concrete recommendations with sound rationale to the State.

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