The Actuary Magazine

ACA Exchange Initiatives Program

Disclaimer: The Society of Actuaries makes no endorsement, representation or guarantee with regard to any content, and disclaims any liability in connection with the use or misuse of any information provided in this series of articles. Statements of fact and opinions expressed herein are solely those of the authors and are not those of the Society of Actuaries.


By Kurt J. Wrobel


As a complement to the health-themed October/November issue of The Actuary, this web-exclusive series dives deeper and showcases several viewpoints from actuaries and other policy experts on the most important aspects of the Affordable Care Act (ACA) Marketplace. These opinions are particularly unique because the authors come from many different organizations and have had many different experiences with the ACA, including experiences with co-ops, Blues Plans, consulting firms, smaller health plans and large national payers.

Authors and topics include:

To provide an analytical grounding for the articles, Rebecca Owen, FSA, MAAA, health research actuary for the Society of Actuaries, begins by offering a general background about the most important recent risk adjustment information released by the Centers for Medicare & Medicaid Services (CMS). This information is particularly important because it illustrates the successes, as well as the most fundamental challenges, in ensuring the long-term sustainability of the program.

With Owen’s research report—“An Examination of Relative Risk in the ACA Individual Market” as background—several of the authors detail the long-term challenges with the program, including the stability of the risk pool, the magnitude and timing of the risk adjustment payment, and the problem of member turnover. While each author approaches these issues with a different perspective, each article has themes with a similar underlying current that tie back to the program’s high-level challenges.

In addition to high-level comments, several authors detail specific technical facets of the risk adjustment program. As suggested throughout this series, the technical aspects of the program are very important, particularly since risk adjustment will be the sole remaining risk protection in the program beginning in 2017. Many authors see opportunities to improve the program—including better accounting for partial year enrollees, the inclusion of pharmacy data adjusting for premium differences for lower-cost plans and using credibility for smaller insurance companies.

Overall, the authors highlight the many challenges that we face as we continue to make improvements in the program. These improvements are an important part of ensuring that we have a sustainable program that provides stable premiums for the members of the ACA Marketplace.

Kurt J. Wrobel, FSA, MAAA, is chief financial officer at the Geisinger Health Plan.

In addition to thanking Kurt Wrobel, FSA, MAAA, and the authors of the ACA Initiative articles, a number of other actuaries and SOA staff gave generously of their time with regards to guidance, generating ideas, reviewing the drafts of the articles, or otherwise offering helpful suggestions as part of the ACA Initiative Task Force.

The SOA would like to thank these additional persons who made a contribution to this initiative: Julia Anderson Bauer; Elaine Corrough, FSA, MAAA, FCA; David Dillon, FSA, MAAA; Greg Fann, FSA, MAAA; Jacque Kirkwood; Hans Leida, Ph.D., FSA, MAAA; Valerie Nelson, FSA, MAAA; Doug Norris, Ph.D., FSA, MAAA; Rebecca Owen, FSA, MAAA; Susan Pantely, FSA, MAAA; Jason Siegel, FSA, MAAA; Rina Vertes, FSA, MAAA; and Joe Wurzburger, FSA, MAAA.

An Examination of Relative Risk in the ACA Individual Market

Stabilizing Forces

The difference premium stabilization programs make in the ACA & Medicare Part D
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A Review of Emerging Data

The long-term sustainability question for the ACA marketplace
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Transfer Problems

Exploring the imbalance in the ACA’s risk adjustment transfer formula
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Five Areas of Concern

Comments on risk adjustment under the ACA
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The ACA Risk Adjustment Program—A Critical Element in Assuring Market Stability and Affordability

Targeted and incremental changes hold promise in strengthening the program
Read More

Market Dynamics Under ACA Risk Adjustment

Looking for solutions to maintain the viability of the overall risk pool
Read More

Financial Fairness

Leveling the playing field among health insurance carriers under the ACA
Read More

Toward Sustainable ACA Markets

Overcoming the challenges caused by risk adjustment
Read More
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