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‘Risk-adjustment’ said to be ‘reverse Robin Hood’

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Douglas Fairbanks as Robin Hood.

An  obscure part of the Affordable Care Act was meant  to support health plans with many sick, (and thus expensive) customers by giving them money from plans with healthier customers.

The goal, notes this Washington Post story, “is to help keep insurance markets stable by sharing the ‘risk’ of sicker people and removing any incentive for plans to avoid individuals who need more medical care. Such stability is likely to encourage competition and keep overall prices lower for consumers, while its absence can undermine both and limit coverage choices — the basic principles of the law.”

“Yet the way the Obama administration has carried out this strategy shows another unexpected consequence of the … law. The administration defends its approach, but critics say the ‘risk adjustment’ program is having a reverse Robin Hood effect — taking money from some plans that are small, innovative or fast-growing, while handing windfalls to some of the industry’s most entrenched players.”

“It’s completely backwards,” New Mexico Insurance Supt.  John Franchini, told The Post. He’s one of several state insurance regulators concerned about how this aspect of the ACA has been handled and its impact on competition.”

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