No deadline is ever really certain. The federal government is giving health insurers more time to submit data for the risk-sharing programs that many market reforms are depending on.
The Centers for Medicare & Medicaid Services extended the deadline of claims and enrollment file submission to the External Data Gathering Environment server, for risk adjustment and reinsurance payment calculation, from Friday, Dec. 5 to Friday, Dec. 29, at 11:59 pm.
The data in question represents files for the first submissions of claims and enrollment data for the 2014 benefit year that will be used to calculate the first monthly payment estimates for the reinsurance and risk adjustment programs.
CMS regulators said they "received numerous requests from issuers for an extension of the deadline for submission of the first production data files," and decided two weeks would be sufficient to work out complaints, discrepancies or kinks related to the EDGE server data submission.
A lot of insurers are still working on testing their submissions and resolving processing errors, CMS regulators wrote in the notice of the delay. Companies seeking technical support can email CMS_FEPS@cms.hhs.gov.
All insurers in individual markets offering non-grandfathered, ACA-compliant health coverage, both on and off of the federally-run public exchanges, are required to establish an EDGE server in order to receive reinsurance payments, along with all individual and small group issuers in states where CMS is operating the ACA's risk adjustment program.
Risk adjustment is a permanent program, while the reinsurance and risk coordinator program, another part of the ACA's "3Rs," are set to run just until 2016, and it won't be until next year that insurers fully understand how the plans subject to risk adjustment and reinsurance will work out financially.
Insurance researchers are waiting to see if those results end up skewed based on hierarchical condition ratings and demographics of membership.
Under the first year of the adjustment programs, males aged 20 to 34 would have pre-tax profits (based on a 3 percent assumed margins) that are actually losses--about negative 3 percent--whereas previously that demographic might have margins of about 30 percent, according to Milliman actuaries Jason Siegel and Jason Petroske.
By their estimates, male members are not profitable until age 45; then as they age they generate between 2.5 and 7 percent margins. The profit scale for female members rises after age 25, reaching 6.2 percent at age 40 and the 6.7 percent at 60.
Other studies have suggested that many insurers may be too optimistic when it comes to expectations of risk-based payouts, given that the total pool of funds is limited.
Citi Research analysts Carl McDonald and Sahil Choudhry examined the 3Rs' assumptions of 85 health plans with 13 million individual lives, and found that as of the first quarter of 2014, many insurers were expecting to receive risk adjustment payments and few were expecting to actually pay.
A particularly big variable in those assumptions is a known unknown. Insurers may have a grasp of their own membership's health risks, but "they don't necessarily know how that compares versus their individual competitors in the state," McDonald and Choudhry noted.