10-August-2016

In a recent Health Affairs Blog essay with professor Nicholas Bagley of the University of Michigan law school, FaegreBD Consulting Senior Director Mike Adelberg broke down the premium stabilization programs of the Affordable Care Act (ACA) that assist health insurers in the pursuit of funding to cover risks in markets remade by the ACA. They concluded that the three programs—reinsurance, risk corridors and risk adjustment—have “not performed as expected” and put insurance companies at risk for significant expenses. Adelberg and Bagley wrote that “trouble with the 3Rs has spooked insurers and raised questions about the viability of the ACA-reformed markets.”

“Perhaps the exchanges will find their footing again, but the difficulties with the 3Rs serve as a stark reminder that ACA implementation remains much harder than supporters anticipated,” the authors explain.

The blog post has since been quoted in both the LA Times and in a tweet by Mark Cuban that was discussed in Politico.