---
kind: "section"
citation: "42 U.S.C. § 18063"
title: "42"
title_heading: "The Public Health and Welfare"
number: "18063"
heading: "Risk adjustment"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/18063"
units:
  - "Chapter 157 — Quality, Affordable Health Care for All Americans"
  - "Subchapter III — Available Coverage Choices for All Americans"
  - "Part E — Reinsurance and Risk Adjustment"
---

# §18063. Risk adjustment

- (a) **In general—**
  - (1) **Low actuarial risk plans—** Using the criteria and methods developed under [subsection (b)](#b), each [State](/usc/42/18024.md?p=d) shall assess a charge on [health plans](/usc/42/18021.md?p=b-1-A) and [health insurance issuers](/usc/42/18021.md?p=b-2) (with respect to [health insurance coverage](/usc/42/18021.md?p=b-2)) described in [subsection (c)](#c) if the actuarial risk of the enrollees of such plans or coverage for a year is less than the average actuarial risk of all enrollees in all plans or coverage in such [State](/usc/42/18024.md?p=d) for such year that are not self-insured [group health plans](/usc/42/18021.md?p=b-3) (which are subject to the provisions of the Employee Retirement Income Security Act of 1974 [[29 U.S.C. 1001](/usc/29/1001.md) et seq.]).
  - (2) **High actuarial risk plans—** Using the criteria and methods developed under [subsection (b)](#b), each [State](/usc/42/18024.md?p=d) shall provide a payment to [health plans](/usc/42/18021.md?p=b-1-A) and [health insurance issuers](/usc/42/18021.md?p=b-2) (with respect to [health insurance coverage](/usc/42/18021.md?p=b-2)) described in [subsection (c)](#c) if the actuarial risk of the enrollees of such plans or coverage for a year is greater than the average actuarial risk of all enrollees in all plans and coverage in such [State](/usc/42/18024.md?p=d) for such year that are not self-insured [group health plans](/usc/42/18021.md?p=b-3) (which are subject to the provisions of the Employee Retirement Income Security Act of 1974).
- (b) **Criteria and methods—** The [Secretary](/usc/42/18024.md?p=c), in consultation with [States](/usc/42/18024.md?p=d), shall establish criteria and methods to be used in carrying out the risk adjustment activities under this section. The [Secretary](/usc/42/18024.md?p=c) may utilize criteria and methods similar to the criteria and methods utilized under part C or D of title XVIII of the Social Security Act [[42 U.S.C. 1395w–21](/usc/42/1395w–21.md) et seq., 1395w–101 et seq.]. Such criteria and methods shall be included in the standards and requirements the [Secretary](/usc/42/18024.md?p=c) prescribes under [section 18041 of this title](/usc/42/18041.md).
- (c) **Scope—** A [health plan](/usc/42/18021.md?p=b-1-A) or a [health insurance issuer](/usc/42/18021.md?p=b-2) is described in this subsection if such [health plan](/usc/42/18021.md?p=b-1-A) or [health insurance issuer](/usc/42/18021.md?p=b-2) provides coverage in the individual or [small group market](/usc/42/18024.md?p=a-3) within the [State](/usc/42/18024.md?p=d). This subsection shall not apply to a grandfathered [health plan](/usc/42/18021.md?p=b-1-A) or the issuer of a grandfathered [health plan](/usc/42/18021.md?p=b-1-A) with respect to that plan.

## Source credit

(Pub. L. 111–148, title I, § 1343, Mar. 23, 2010, 124 Stat. 212.)

## Notes

### Editorial Notes

### References in Text

The Employee Retirement Income Security Act of 1974, referred to in subsec. (a), is Pub. L. 93–406, Sept. 2, 1974, 88 Stat. 829, which is classified principally to chapter 18 (§ 1001 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 29 and Tables.

The Social Security Act, referred to in subsec. (b), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Parts C and D of title XVIII of the Act are classified generally to parts C (§ 1395w–21 et seq.) and D (§ 1395w–101 et seq.), respectively, of subchapter XVIII of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables.