► Minuteman Health NewsroomJuly 1, 2016

Minuteman Health to Pay out $16.6 Million to Risk-Adjustment

Amount is $1 million less than company projected and reserved for; membership is up and overall financial health remain strong.

BOSTON—The Centers for Medicaid & Medicare Services (CMS) on June 30 announced the Risk Adjustment results for 2015. Minuteman Health Inc. (www.minutemanhealth.org) ended up with a final bill of $16,653,762, which is $1 million less than the company had projected (see table below).

As a result, Minuteman will record a Q2 reserve release of $1 million. This will show as an earnings gain.

Minuteman is pleased that the company’s conservative projection proved accurate. The company’s financial condition is strong, its membership is up more than 85 percent over 2015, and it is showing a year-to-date profit. But the Risk Adjustment program has proven to be highly volatile.

Risk adjustment can work in theory, but the deficiencies in the current program are now acknowledged by the federal rule-makers who created and imposed it. Even so, the federal government currently plans to phase in the needed changes over the next five years. That is far too slow.

Minuteman continues to call on state and federal policymakers to step in and immediately take action. The government has disrupted the marketplace, and consumers are paying for it through higher premiums.

The table below shows that 40 percent of all premium paid by Minuteman members will be going to insurance companies that charge higher premiums. This means that those who purchased an affordable plan from Minuteman will be subsidizing others who chose to spend a lot more elsewhere.

Much of this has nothing to do with the fact that the federal formula over-scores new members as being healthier than they really are. Rather, people are forced to pay a tax simply because they chose to buy a more affordable plan.

Minuteman has been a leading proponent of Risk Adjustment changes for years. The company is a founding member of Consumers for Health Options, Insurance Coverage in Exchanges in States (CHOICES), a coalition of health plans from across the country formed to identify structural issues with the current version of commercial Risk Adjustment and propose concrete solutions. 

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About Minuteman

Minuteman Health, Inc. is non-profit health maintenance organization (HMO) committed to removing inefficiencies from today’s health insurance system to provide high-quality care, cut administrative costs and reduce premiums for individuals and businesses in Massachusetts and New Hampshire.

Minuteman Health’s In-Plan Provider network includes over 11,300 hospitals, physicians, and specialists who provide high quality care at lower costs in Massachusetts and New Hampshire. Updates on Minuteman Health’s evolving provider network can be found at www.minutemanhealth.org.

inuteman is marketed in Massachusetts through its website, brokers, Health Services Administrators (www.HSAinsurance.com) and the Massachusetts Health Connector. It is marketing in New Hampshire through its website, brokers, and the Federal Healthcare Exchange.

About CHOICES

CHOICES members are non-profit as well as investor-owned, health system-sponsored and independent, and newer entrants as well as companies with decades of experience as members of their local communities. The group came together to examine what gaps may exist between the policy intent and the practical reality of the ‘3Rs’ programs today. Such gaps are to be expected in any launch of a new methodology, and CHOICES looks forward to continuing to work productively with CMS to replace old assumptions with the current data.

CHOICES founding members include Minuteman Health, Health New England (Massachusetts), HealthyCT (Connecticut), Land of Lincoln (Illiniois), Melody Health Care (Colorado), New Mexico Health Connections, Evergreen Health (Maryland), Bright Health Plans (Minnesota), Cox Health Plans (Missouri), Medical Associates Health Plans (Iowa), and the National Alliance of State Health CO-OPS (NASHCO).

Media Contact:
Jim Borghesani
617-833-9327

jim@pri-media.com
 

Lisa McTighe
Director of Marketing and Communications
855-644-1776

lisamctighe@minutemanhealth.org