Risk adjustment transfers totaled $10.8 billion in 2019, with some insurers on the ACA's exchanges earning substantial payouts, according to new data from the Trump administration.
The Centers for Medicare & Medicaid Services released (PDF) its annual look at the Affordable Care Act's risk adjustment program, and said that 561 insurers participated in 2019. The $10.8 billion was split evenly between payments made to insurers and payments to CMS to maintain budget neutrality.
The individual market accounted for the largest share of transfers, or about $7.98 billion.
Payments made to some insurers were significant; for example, Blue Shield of California earned more than $1 billion in risk adjustment, with the bulk coming from an $873.8 million payout for its individual market plans.
Blue Cross Blue Shield of Texas earned a payout of nearly $400 million, and Independence Blue Cross raked in about $41 million.
Some also paid the government back at a high levels. In California, for instance, Kaiser Foundation health plans paid nearly $796.5 million into the program, and in Maryland, Kaiser's plans paid in $150 million.
Blue Care Network of Michigan paid $43.8 million into the program, according to CMS' report.
The risk adjustment program aims to allocate funds from insurers who take on larger numbers of low-risk enrollees to those who take on higher numbers of high-risk enrollees on the ACA's exchanges. The goal is to prevent insurers from avoiding high-risk members.
CMS said in the report that risk adjustment operated smoothly in 2019, saying trends in the program were largely on par with the year prior. Transfers accounted for about 7% of premiums, as was the case in 2018.
About $10.4 billion in risk adjustment transfers were made in 2018.
"The risk adjustment program is working as intended by more evenly spreading the financial risk carried by issuers that enrolled higher-risk individuals in a particular state market risk pool, thereby protecting issuers against adverse selection and supporting them in offering products that serve all types of consumers," according to the report.