Quarterly report pursuant to Section 13 or 15(d)

Affordable Care Act

v3.20.2
Affordable Care Act
6 Months Ended
Jun. 30, 2020
Affordable Care Act [Abstract]  
Affordable Care Act Affordable Care Act
The Affordable Care Act established risk spreading premium stabilization programs as well as minimum annual medical loss ratio and cost sharing reductions.
The Company's net receivables (payables) for each of the programs are as follows ($ in millions):
 
June 30, 2020
 
December 31, 2019
Risk adjustment receivable
$
410

 
$
245

Risk adjustment payable
(1,918
)
 
(1,239
)
Minimum medical loss ratio
(488
)
 
(367
)
Cost sharing reduction receivable
99

 
73

Cost sharing reduction payable
(1
)
 
(1
)

In July 2020, the Centers for Medicare and Medicaid Services (CMS) announced the final risk adjustment transfers for the 2019 benefit year. As a result of the announcement, the Company reduced its risk adjustment net payables by $94 million from December 31, 2019. After consideration of minimum MLR, estimated Risk Adjustment Data Validation (RADV) audit results, and other related impacts, the net pre-tax benefit recognized was approximately $63 million for the six months ended June 30, 2020. Final RADV results are expected to be announced by CMS in August 2020.