Employer Purchasing Coalitions and Medicaid: Experiences with Risk Adjustment

Choice among health plans increases patient satisfaction with care and enables families to select a plan that best meets their needs. Offering multiple plans, however, creates the possibility that sicker patients will congregate in a few plans, leading to high costs of care and spiraling premiums. To avoid this problem, many employers offer only one insurance carrier to workers. Business purchasing coalitions and public programs, which represent a large number of health plan enrollees, could help mitigate the problem by adjusting premiums to reflect the health status of those enrolled in a given plan. In Employer Purchasing Coalitions and Medicaid: Experiences with Risk Adjustment, authors Melinda Beeuwkes Buntin and Joseph Newhouse describe the techniques of three members of the National Business Coalition on Health that have attempted to employ risk adjustment techniques.