A new article from CNN/Money examines the short-term implications of reform for a variety of populations, especially the uninsured and underinsured. While much of the press attention so far has focused on the benefits for un- and underinsured children, this article also clarifies the implications for early retirees:
To encourage companies facing higher costs in providing insurance, the legislation will jumpstart a temporary reinsurance program for employers who provide coverage to retired workers between the ages of 55 and 64, who are too young for Medicare.
Without this incentive, this demographic would have to go uninsured, or buy their own insurance – usually at higher rates – if they were dropped by their employer’s plan. The measure is expected to take effect in late June.
“The government will refund all claims up to 80% of retiree claims valued between $15,000 and $90,000,” said Michael Sturm, principal and consulting actuary with consulting firm Milliman Inc.
The reinsurance program will exist until 2014 or until the $5 billion set aside for the program is exhausted, Sturm said.
To find out more about other implications for the un- and underinsured, read the full article here.
Reform, Reinsurance, Underinsured
A new healthcare reform briefing paper by Milliman principal Rob Damler looks inside the first year’s experience of a Medicare expansion program in Indiana. This voluntary program offers a number of lessons about the behavior of uninsured populations and may offer various considerations as the country looks to find a way to cover the uninsured. Excerpting from the paper:
Anti-selection in healthcare describes, in general terms, the results that occur from the financial behavior of the highest-risk, most expensive people in seeking healthcare coverage that is available to them. The people who create anti-selection for a healthcare plan include those with serious chronic conditions, individuals with immediate near-term medical treatment needs, and those with pent-up demand for services that have been deferred for financial or other reasons. Access to coverage is of great value to such individuals, compared to the perceived value of coverage for someone without known acute or chronic care needs, and they are more likely to enroll in a newly available program. This is especially true if they do not currently have realistic access to coverage or if they have to pay a premium for such coverage out of limited income. A consequence of anti-selection is higher cost levels than would be experienced by the population at large.
Medicaid, Reform, Underinsured
Milliman principal John Pickering was quoted by CNN Money today in an article about how the underinsured are affecting the cost of healthcare for all Americans. In John’s words:
“If the underinsured can’t pay the bills, the hospital either writes it off as bad debt or shifts the cost to its charity care program,” said John Pickering, principal and consulting actuary with consulting firm Milliman Inc.
“It’s a vicious cycle,” said Pickering.
John and fellow Milliman principal Will Fox have conducted key analysis for AHIP on the shifting of costs across the healthcare system.