Lessons learned from Medicare Part D's and Affordable Care Act's risk stabilization programs applied to future affordable care act replacements

Creating an affordable health insurance market for individuals who are not in the group market is relevant to public health. Having health insurance increases the health of the individual especially in cases of acute injury. While other interventions such as increasing individuals’ social determinants of health or other policy interventions such as a sugar tax or a smoking ban may provide larger public health benefits, providing health insurance is still a worthwhile public health intervention. Affordable access to the healthcare system can greatly reduce the large negative impacts to individuals including better control of diabetes and prevention of heart attacks and strokes. In the individual market for health insurance, risk stabilization is an important tool to induce insurers to offer affordable plans. Without risk stabilization, the insurers may still offer an insurance plan at an unaffordable rate or may not offer an insurance plan at all. Two major American government sponsored health insurance laws have utilized congruent risk stabilization in the 21st century: Medicare Part D and the Affordable Care Act. These laws utilized the 3 Rs, which are risk adjustment, reinsurance, and risk corridors. By comparing the intended effects of these risk stabilization measures with the actual effects, this essay seeks to provide analysis on how the 3 Rs could have been better implemented in the ACA to reduce costs and provide more selection for individuals. The essay also seeks to address the future policy implications of risk stabilization for the individual market