Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: January 17, 2019

Program Area: Risk Adjustment (RA)

Question: What is the difference between a market and a risk pool?

Answer: Market refers to the groups that are eligible to enroll in Patient Protection Affordable Care Act (PPACA) compliant health insurance plans. There are two (2) PPACA markets in each state-individual and small group. A risk pool is a grouping of plan types within each market. Platinum, gold, silver and bronze metal level plans are one group of plans in each market. Catastrophic plans are a separate group that only exists in the individual market. In addition, States have the option to merge their individual and small group markets and are referred to as a merged market. Therefore, in most states there are three (3) risk pools: 1) individual market and platinum, gold, silver, and bronze plans; 2) individual market and catastrophic plans; and 3) small group market and platinum, gold, silver, and bronze plans. In merged market states there are two (2) risk pools: 1) individual market and small group market and all platinum, gold, silver, and bronze plans, and 2) individual market and catastrophic plans.

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