Risk Adjustment and Health Insurance

he Affordable Care Act calls for a risk adjustment program that aims to eliminate incentives for health insurance plans to avoid people with pre-existing conditions or those who are in poor health. Risk adjustment ensures that health insurance plans have additional money to provide services to the people who need them most by providing more funds to plans that provide care to people that are likely to have high health costs. Insurance plans then compete on the basis of quality and service, and not on the basis of whether they can attract healthy people.

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