Nov 26 The U.S. government has issued a proposal
that would likely increase risk payments in 2014 to health
insurers offering plans on the Obamacare exchanges after the
companies complained a recent policy change allowing people to
keep their insurance policies had changed the financial
The rule, published on Monday in the Federal Register,
lowered the threshold at which risk payments kick in for the
sickest health plan members. The government proposed paying
insurers 80 percent of claims greater than $45,000 in 2014.
Previously the lower limit was $60,000.
There is a 30-day comment period for the proposed rule.
In addition, the government has proposed a state-specific
adjustment for risk payments based on how many people in the
state extend their current polices, Citibank analyst Carl
McDonald explained in a research note.
The exchanges are being created as part of President Barack
Obama's healthcare reform law. An estimated 7 million people are
expected to sign up.
Insurers including Aetna Inc, Humana Inc,
WellPoint Inc, Cigna Corp, UnitedHealth Inc
and Molina Healthcare Inc have all offered plans
on the state-based exchanges.
"Whether good or bad, it's always worth pointing out that
most of the publicly traded plans have little existing exposure
to the individual market, while the exchange participation of
several plans is quite limited in 2014," McDonald wrote.
As an incentive for participating in the exchanges, the
insurers were promised certain risk payments for the first three
years to help offset uncertainty about the health of
Technology problems on the exchange have slowed enrollment
significantly, calling into question whether insurers will get
the mix of healthy and sick people on which they had based their
When Obama announced a plan about two weeks ago to allow
individuals to keep their current plans longer, insurers
complained it would remove even more people from the pool of
applicants and asked for adjustments to the risk payments.