Table C.1.

Fit and Power Simulation Results using HHS-HCC Statutory Coefficients

Simulated Payment Scheme	(1)	(2)	(3)	(4)
	Fit		Power
	R2	CPM	Inpatient Events	Outpatient Events
1 Concurrent RA (ACA Policy, 2017+)	0.35	0.24	0.59	0.72
2 Reinsurance	0.60	0.19	0.64	0.84
3 Concurrent RA + Reinsurance (ACA Policy, 2014–2016)	0.54	0.32	0.24	0.56

Notes: This table replicates results from Table 1 using the statutory risk adjustment coefficients (aka “weights”) developed by the Department of Health and Humans Services, in place of the risk adjustment model calibrated for this paper. Rows (1) and (3) correspond to the actual payment policy in the ACA Exchanges, based on concurrent risk adjustment (RA) and reinsurance. Fit in column (1) is measured as 1 – RSS/TSS in a regression of insurer payments on insurer costs. Fit in column (2) is calculated as the Cumming’s Prediction Measure (CPM). Power is calculated via a simulation in which healthcare events are randomly removed to determine the effect on insurer costs and payments at the individual level. Power for inpatient and outpatient events simulated separately. Reinsurance is simulated as 100% reimbursement after exceeding an attachment point of $45,000. Consult the text for full details