Question

Are the individuals covered by non-group insurance after the ACA Modeled to hae, on average, more morbidity than those in non-group (excluding the high risk pool) before ACA?

Answer 1

Before the Affordable Care Act (ACA) was enacted, insurers in most states could vary their premiums in the nongroup market to reflect the anticipated health care costs of enrollees. They also could offer plans that varied in benefits covered. Young, healthy people in these states could purchase limited benefit packages at low premiums, while older, sicker people seeking comprehensive coverage would pay much more. Some states sought to counteract these practices by mandating coverage of specific benefits and restricting insurers’ rate-setting practices. However, these efforts to restrict rating rules and expand benefits  often led to higher premiums for younger, healthier . people, causing them to forgo insurance altogether.The Affordable Care Act Affects People Who Buy Health Insurance in the Individual Market. Public debate around the Affordable Care Act (ACA) has focused recently on recipients of private, individual (non-group) insurance whose health plans are being terminated and who fear they may need to pay more for new coverage .

High-Risk Pool Plan (State).High-risk pool plans offer health insurance coverage that is subsidized by a state government. Typically, your premium is up to twice as much as you would pay for individual coverage if you were healthy.A health insurance risk pool is a group of individuals whose medical costs are combined to calculate premiums. Pooling risks. together allows the higher costs of the less healthy to be offset by the relatively lower costs of the healthy, either in a plan overall or within a premium rating category.

ACA risk adjustment was designed to be revenue neutral by state and market. Payment transfers are calculated separately for the individual and small group markets, except for states that merged the two markets. Within each state and market, total payments from insurers with a relatively healthier population are set equal to total payments to insurers with a relatively sicker population. No external funding is provided. Since risk adjustment only transfers funds among insurers, it can compensate for relative health status differences among insurers, but it does not ensure that overall market premiums are sufficient to cover the average claims within the state if the market as a whole has a worse-than-expected risk profile.