Risk-adjustment systems used to pay health plans in individual health insurance markets have evolved towards better "fit" of payments to plan spending, at the individual and group levels, generally achieved by adding variables used for risk adjustment. Adding variables demands further plan and...

The conventional method for developing health care plan payment systems uses existing data to study alternative algorithms with the purpose of creating incentives for an efficient and fair health care system. In this paper, we take a different approach and modify the input data rather than the...

Risk adjustment of payments to health plans is fundamental to regulated competition among private insurers, which serves as the basis of national health policy in many countries. To date, estimation and evaluation of a risk adjustment model has been a two-step process. In a first step, the...

Two of the three elements of the ACA's "premium stabilization program," reinsurance and risk corridors, are set to expire in 2017, leaving risk adjustment alone to protect plans against risk of high-cost cases. This paper considers potential modifications of the HHS risk adjustment methodology...

Health insurance markets face two forms of adverse selection problems. On the demand side, adverse selection leads to plan price distortions and inefficient sorting of consumers across health plans. On the supply side, adverse selection creates incentives for plans to inefficiently distort...

In order to encourage entry and lower prices, most regulated markets for health insurance include policies that seek to reduce the uncertainty faced by insurers. In addition to risk adjustment of premiums paid to plans, the Health Insurance Marketplaces established by the Affordable Care Act...