Blue Cross and Blue Shield plans like Blue Shield of California, Health Care Service Corp. (HCSC), Florida Blue and Anthem, Inc. potentially had the most to lose when CMS said it would stop making Affordable Care Act risk adjustment payments — and the most to gain when the agency abruptly reversed course. Those four Blues plans were slated to lose around $2.5 billion collectively if the payments had remained halted.
Meanwhile, some insurers would have seen large debts under the risk adjustment program erased if the risk adjustment payments were permanently blocked, including Centene Corp., which owes $685 million, Molina Healthcare, Inc., which owes $853 million, and Kaiser Permanente, which owes $928 million.
Of the Blues plans, Independence Blue Cross, which owes $72 million under the program, would have fared the best if the payments were permanently blocked.
“I would think that Blues should be pleased they will receive their bonus after all and those that must pay in are probably going to do fine as well,” says William De Marco, founder and president of Pendulum HealthCare Development Corp. “However, the whole process and how it was handled will contribute to the uncertainty within health plans as to whether the government is a good business partner.”
Credit Suisse analyst A.J. Rice notes that out of the 29 Blues plans (excluding Anthem) that are participating in the program, only eight owe risk-adjustment payments — the rest are owed money. Before CMS restored the payments, he warned that Blues plans might need to reassess their approach for individual and small business markets in 2019, and that the elimination of the payments might have helped to quell otherwise potentially aggressive Blues pricing in those ACA markets for 2019.