The Centers for Medicare & Medicaid Services (CMS) has released new data on risk adjustment payments for 2023.
The agency said (PDF) insurers participating on the Affordable Care Act’s exchanges will pay $10.3 billion as part of the risk adjustment program. Risk adjustment state transfers as a percent of premiums declined from 2022, according to the report.
This trend is likely driven by shifts in the risk pools, according to CMS, which are likely impacted by ongoing insurer expansion into new regions.
An analysis from investment bank Stephens highlights which payers are set to pay the most into risk adjustment and which firms are set to earn the highest transfers. The Stephens analysts estimate Aetna will pay the highest fee at about $1.38 billion.
Not far behind are Kaiser Permanente at $1.04 billion and Oscar Health at $1.01 billion. UnitedHealthcare is likely to owe $812 million in risk adjustment payments, according to the Stephens analysis.
Cigna is estimated to owe $609 million in risk adjustment payments, according to the report.
Meanwhile, not-for-profit Blue Cross Blue Shield plans are set to be the biggest benefactors of 2023 risk adjustment, according to the analysis. In aggregate, these plans are projected to receive $5.07 billion in risk adjustment transfers, Stephens projects.
Centene and Molina Healthcare are also winners in the 2023 risk adjustment, according to the analysis. Centene is likely to receive $20 million in transfers, while Molina is set to see $40 million.
For Centene specifically, the analysts believe this windfall will prove a boon as its exchange business helps offset challenges in Medicare and Medicaid.
“[Centene] could decide to reallocate the upside towards its 2024 risk adjustment accruals or to strengthen reserves more generally, given 2024 observed healthcare utilization trends across the continually elevated Medicare Advantage and now Medicaid end markets,” they wrote. “However, based on the data we have analyzed in this report, we expect that the [exchange] market should provide CNC with a significant EPS tailwind in 2024 to help offset the margin pressures in both Medicare and Medicaid.”