MDH Study on State-based Risk Adjustment in the Individual & Small Group Market
In 2013, the Minnesota Legislature directed the Minnesota Department of Health (MDH) to study the potential costs and benefits of conducting state-based risk adjustment in Minnesota’s small group and individual health insurance markets (Laws of Minnesota 2013, chapter 108, article 1, section 65). Specifically, MDH was directed to:
- Evaluate the extent to which Minnesota's All Payer Claims Database (MN APCD) data could be used for conducting state-based risk adjustment;
- Collect additional data needed for the study of risk adjustment;
- Conduct modeling to determine if a Minnesota-based risk adjustment model can perform better and be more cost-effective than the federal risk adjustment model; and
- Submit a report to the Legislature outlining the study recommendations by October 1, 2015.
MDH has retained the services of a vendor, Milliman-New York, to support this work. MDH will be seeking input from a wide range of stakeholders through the study period, both through a formal Request for Information (PDF) (RFI) process and through public meetings and interviews.
Additional detail on the study approach is available in a Fact Sheet (PDF). An interim report to the Legislature (April 2014) that presented the initial findings is available at Risk Adjustment in the Individual & Small Group Market in Minnesota - A Progress Report (PDF).