The Centers for Medicare & Medicaid Services Friday reported reinsurance and risk adjustment amounts for specific health plans for benefit year 2016. Funded by health insurance issuers and certain self-insured group health plans, the transitional reinsurance program was established by the Affordable Care Act to stabilize premiums in the individual health insurance market for the first three years of the new insurance marketplaces. The permanent risk adjustment program, also created by the ACA, transfers funds from plans with lower-risk enrollees to plans with higher-risk enrollees to encourage insurers to compete based on the value and efficiency of their plans rather than by attracting healthier enrollees. Insurers will use the reinsurance and risk adjustment amounts to calculate their risk corridor payments and medical loss ratio rebates, if any.

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