Other Updates
The 2020-2022 benefit year enrollee-level EDGE data was proposed to recalibrate the HHS risk adjustment.[8]
The proposed 2026 benefit year HHS risk adjustment model factors were published in Tables 4 through 9.[9]
The R-square statistics for 2026 model were published in Table 10.[10]
No changes were proposed to the CSR adjustment factors.[11]
No changes were proposed to the risk adjustment transfer formula proposal, or the high-cost risk pool parameters (maintain the $1 million threshold and 60 percent coinsurance rate).[12]
Risk adjustment fee is proposed to not change from 2025, $0.18 PMPM, unchanged from 2025.[13]
Medical Loss Ratio
HHS is proposing to make adjustments to the medical loss ratio (MLR) reporting formula for certain “qualified issuers” who have significant risk adjustment transfers.
HHS proposed a “qualifying issuer” to be defined as “an issuer whose ratio of net payments related to the risk adjustment program under section 1343 of the ACA to earned premiums prior to accounting for the net payments or receipts related to the risk adjustment, risk corridors, and reinsurance programs (as described in §158.130(b)(5)) in a relevant State and market is greater than or equal to 50 percent.”[14]
The MLR formula adjusts incurred claims by risk adjustment transfers, however, the proposal would allow qualifying issuers to NOT adjust incurred claims by the risk adjustment transfers.[15] Instead, the earned premium in the denominator. HHS suggested the current MLR methodology may not be appropriate for certain issuers with unusual business models causing significant risk adjustment transfers. The current and proposed formulas were also published in the E. Part 158—Issuer Use of Premium Revenue: Reporting and Rebate Requirements section, subsection 2. Reimbursement for Clinical Services Provided to Enrollees (§§158.140, 158.240).
[8] B. 45 CFR Part 153—Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment – 2. HHS Risk Adjustment (§153.320) – a. Data for HHS Risk Adjustment Model Recalibration for the 2026 Benefit Year
[9] B. 45 CFR Part 153—Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment – 2. HHS Risk Adjustment (§153.320) – d. Proposed List of Factors To Be Employed in the HHS Risk Adjustment Models (§153.320)
[10] B. 45 CFR Part 153—Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment – 2. HHS Risk Adjustment (§153.320) – f. Model Performance Statistics
[11] B. 45 CFR Part 153—Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment – 2. HHS Risk Adjustment (§153.320) – e. Cost-Sharing Reduction Adjustments
[12] B. 45 CFR Part 153—Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment – 3. Overview of the HHS Risk Adjustment Methodology: State Payment Transfer Formula
[13] B. 45 CFR Part 153—Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment – 5. HHS Risk Adjustment User Fee for the 2026 Benefit Year (§153.610(f))
[14] Part 158—Issuer Use of Premium Revenue: Reporting and Rebate Requirements – 1. Definitions (§158.103) and 2. Reimbursement for Clinical Services Provided to Enrollees (§§158.140, 158.240)
[15] Part 158—Issuer Use of Premium Revenue: Reporting and Rebate Requirements – 2. Reimbursement for Clinical Services Provided to Enrollees (§§158.140, 158.240)