The old and the beautiful: How age and gender affect costs and premiums in commercial healthcare

We generally consider living a long life an important goal, and it certainly does beat the alternative. But one side effect of getting older is that, as we age, we typically acquire additional acute and chronic medical conditions, and the prevalence of many common chronic medical conditions increases significantly. Age/gender rating is an area in which actuarial considerations are often in direct tension with social or public policy considerations: there is a natural tension between the policy goals of making coverage more affordable for older people (with higher average costs) and the goal of encouraging younger people (with lower average costs) to purchase health insurance coverage.

In an article first published in the magazine The Actuary, Milliman consultants Doug Norris, Hans Leida, Erica Rode, and Travis (T.J.) Gray explore how age and gender affect costs and premiums in commercial healthcare.

Introducing the SSIP: Provisions for market stabilization in the Better Care Reconciliation Act

On June 22, the U.S. Senate released its draft of a bill to amend portions of the Patient Protection and Affordable Care Act (ACA), called the Better Care Reconciliation Act (BCRA). The State Stability and Innovation Program (SSIP), part of the BCRA, is a grant program that provides funds directly to insurers as well as to states with the primary goal to stabilize and support the individual market. The SSIP is composed of two distinct parts. The first provides funds for short-term market stabilization programs that will go directly to insurance carriers in the first four years of the program. The second provides funds for the “Long-term SSIP,” which will be allocated to states starting in 2019 to fund various programs.

This paper by Milliman’s Thomas Murawski discusses elements of the SSIP and outlines the details from the draft bill released on June 22.

Principles and evaluation of care management interventions

With greater emphasis on delivering quality health outcomes while reducing costs, organizations are making care management an indispensable part of their system. This paper by Milliman consultants Neha Taneja and Joanne Buckle illustrates the importance of evaluating interventions for policymakers, healthcare organizations, payers, and providers seeking to implement care management.

How capitation arrangements can be applied to deliver the NHS Sustainability and Transformation Plans

Capitation arrangements are traditionally used as an alternative to fee-for-service reimbursement to facilitate a transfer of risk from the funder to providers of healthcare services. The objective of introducing risk sharing between funders and providers is to encourage the delivery of efficient and patient-centred care by incentivising the integration of services and minimising unwarranted variation in care. This paper by Milliman’s Joanne Buckle and Tanya Hayward explores how the principles of a traditional capitation arrangement may apply in a regional National Health Service system where the stakeholder roles differ and the implementation of various key capitation principles is not possible.

LTC rate increase process for stakeholders to consider

In September 2016, Milliman actuaries Missy Gordon and Amy Pahl published a report entitled “Long-term care rate increase survey.” The results of the survey provide insurers, state regulators, and other stakeholders with some strategies and approaches to filing long-term care (LTC) rate increases. All but two of the 26 companies that participated in the survey filed for at least one LTC rate increase.

Gordon and Shawn Stender recently summarized the report in the April 2017 issue of Long-Term Care News. In the article, the authors highlight several questions that companies and regulators frequently ask regarding LTC rate increases. They also provide answers based on their experience and the LTC survey results, which are grouped into a three-step process.

How do cost-sharing reduction (CSR) subsidies affect your state?

The fate of the CSR subsidies in the Patient Protection and Affordable Care Act (ACA)—or rather, whether they’ll continue to be federally funded—is a highly anticipated decision for healthcare stakeholders nationwide. Cost-sharing reduction subsidies are payments made to insurers that reduce copays and deductibles for qualifying individuals and families earning up to 250% of the federal poverty level (FPL) who purchase health insurance through the insurance marketplaces. Their government funding is currently under legal challenge, awaiting the White House’s decision whether or not to drop the House v. Price lawsuit.

Recently, Politico.com reported that Republicans are inching closer to a decision regarding the fate of CSR funding. As this decision will affect healthcare stakeholders in every state, it is important for policymakers to understand the health and stability of the individual market and how subsidies have affected health insurance consumers. Recently, my colleagues and I at Milliman prepared a profile of the individual health insurance market for each state along with the District of Columbia. The profile summarizes insurer financials, marketplace enrollment, and federal assistance provided to households purchasing insurance coverage through the insurance marketplaces.

We’ve compiled some of our 2017 data into an infographic that takes a closer look at ACA cost-sharing subsidies to enable stakeholders to better understand the population currently receiving assistance and the amount of assistance being provided. The graphic looks at two metrics: the estimated average annual CSR subsidy per qualifying individual and the number of individuals receiving CSRs by state in 2017. Results below provide a clearer picture of which states’ populations more heavily rely on CSR subsidies and by how much. Florida has the largest number of CSR recipients of any state, with approximately 1 million recipients in 2017. On a national level, we estimate that there are 5.7 million individuals covered by CSR subsidies nationally, and the sum of federal CSR expenditures will exceed $5.8 billion in CY 2017.

Cost-sharing reduction

More data and analysis can be found at Milliman.com/hcr.

This blog post first appeared on LinkedIn.