Risk Pools and Adverse Selection General Idea Quality of Pool More - - PowerPoint PPT Presentation

risk pools and adverse selection general idea quality of
SMART_READER_LITE
LIVE PREVIEW

Risk Pools and Adverse Selection General Idea Quality of Pool More - - PowerPoint PPT Presentation

Colorado Division of Insurance Risk Pools and Adverse Selection General Idea Quality of Pool More Important Than Size Photo by flickr iLoveMountains.org Photo by flickr user marcn Where is Adverse Selection Market Do healthy people


slide-1
SLIDE 1

Colorado Division of Insurance

Risk Pools and Adverse Selection

slide-2
SLIDE 2

General Idea Quality of Pool More Important Than Size

Photo by flickr user marcn Photo by flickr iLoveMountains.org

slide-3
SLIDE 3

Where is Adverse Selection

Market

Do healthy people purchase insurance

Exchange

Does the revenue match expenses for products in the Exchange

Carrier

Does one carrier attract a population where revenues don't match expenses

slide-4
SLIDE 4

Current Individual Market

slide-5
SLIDE 5

Current Small Group Market

slide-6
SLIDE 6

Ideal 2014 Market

slide-7
SLIDE 7

Dysfunctional 2014 Market

slide-8
SLIDE 8

Causes of Dysfunction

Bad risk adjustment mechanism

  • Selection effects dominate
  • Risk transfer inside/outside breakdown
  • Administrative cost differentials
  • Non-subsidy members choose based on cost
  • Additional costs to meet Exchange requirements
  • Information differences
  • Exchange rates are known by October, non-

Exchange can file till the end of October

Other rules

  • Open enrollment period in the outside market?
slide-9
SLIDE 9

Decision Point