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CCIIO Releases Risk Adjustment White Paper - September 27, 2011

The Center for Consumer Information and Insurance Oversight has released a white paper discussing various issues surrounding the Affordable Care Act's risk adjustment program, one of the mechanisms created by the Act to help stabilize premiums in the non-grandfathered individual and small group market (inside and outside the Exchanges) in 2014. The program assesses charges on plans with lower than average health risk and transfers those funds to plans with higher than average health risk. HHS is charged with developing a Federally-certified risk adjustment methodology that States may adopt. States also have the ability to propose alternative methods to HHS for approval. The CCIIO's white paper outlines various choices available in developing a risk adjustment model, methods for calculating payments and charges, and permissible rating variations. The white paper is a follow-up to proposed regulations issued by HHS in July.  Comments to the proposed rules can continue to be submitted until Wednesday, September 28, 2011.