Table 3.
Risk Adjustment and Premium Regression Results
| Model 1 Premiums only |
Model 2 Risk Adjustment only |
Model 3 Combined |
Model 4 Combined |
Model 5 Combined |
||
|---|---|---|---|---|---|---|
| Constraints* | None | None | RA budget | RA budget & premium ratio | RA budget, premium ratio, & half with no history | |
| CMS-HCC Model Weights | History | no history | ||||
| Female 0–34 | $2,122 | $953 | $1,050 | $1,326 | $1,189 | |
| Female 35–44 | $2,054 | $877 | $994 | $1,225 | $1,502 | |
| Female 45–54 | $2,654 | $1,138 | $1,087 | $1,031 | $2,330 | |
| Female 55–59 | $3,309 | $1,407 | $1,183 | $1,041 | $3,093 | |
| Female 60–64 | $5,518 | $3,227 | $3,002 | $3,246 | $5,247 | |
| Premiums | ||||||
| young_n_urban | $2,319 | $1,027 | $999 | $945 | ||
| young_m_urban | $2,780 | $1,407 | $1,363 | $1,411 | ||
| young_s_urban | $2,314 | $1,039 | $1,014 | $1,028 | ||
| young_w_urban | $2,295 | $1,118 | $977 | $939 | ||
| old_n_urban | $5,550 | $1,930 | $1,999 | $1,889 | ||
| old_m_urban | $6,166 | $2,639 | $2,725 | $2,823 | ||
| old_s_urban | $5,540 | $1,978 | $2,027 | $2,056 | ||
| old_w_urban | $5,034 | $1,649 | $1,954 | $1,878 | ||
| R-squared | 0.12 | 0.169 | 0.171 | 0.17 | 0.15 | |
Source: Medical Expenditure Panel Survey, 2005–2009; Sample size =11,568
Notes: Estimates reported in $2009. HCC variable weights, male CMS-HCC weights and rural premiums not shown. Full results are contained in Appendix B. All estimates significant at p=.001 or better, except Female 55–59, w/history (Model 5), which is significant at p=.05 For the premium variables, the geographic regions are n=Northeast, m=Midwest, s=South, and w=West, interacted with urban and rural indicators.
RA budget constraint imposes that the average risk adjusted payment equal $2000. Premium ratio requires that within geographic regions, the ratio of premiums for older enrollees to younger enrollees be no more than 2:1. Half with no history implies that health status information is missing for (a randomly selected) half of the sample.