Healthcare purchasers such as employer groups, multi-employer trusts, and associations can offer their participants choice in health coverage. But with multiple carrier or benefit plan options, there will be an inherent selection risk, as individuals make coverage selections that account for their underlying health status. This often results in an increase in the overall cost of providing health insurance. Risk adjustment can be used to quantify and reallocate this cost. 

In this paper, we examine risk adjustment programs, with our presentation organized as follows: 

• Why adjust for selection risk?
• Existing programs
• Defining your approach
• Choosing your moment
• Program refinements