Paid family leave proposal leaves states with funding issues to consider

President Donald Trump’s 2018 budget proposal includes a paid family leave insurance program for workers in the United States. Under the president’s proposal, states would be allowed to design the paid leave program for their own jurisdictions as long as the benefits meet minimum standards. This means that some states may have a lot to consider when preparing for a new insurance program, such as funding methods, administration, and specific benefit design features. The article “Paid family leave in the United States” by Paul Correia offers some perspective.

Level vs. relative premium increases and their effect on actuarial equivalence in long-term care insurance

The long-term care insurance industry continues to look for ways to manage disparities between premiums and costs. Premium increases and benefit reductions are likely to remain major factors in business decision-making. Insurers must carefully consider the impact of rate changes on their bottom line—not just in terms of raw numbers, but in how they relate to experience and the potential for future profits or losses across the spectrum of benefits. Milliman actuaries Mike Bergerson and John Hebig provide some perspective in this article.

This article was originally published in the April 2017 issue of Long-Term Care News.

How would a cure for Alzheimer’s disease change the LTC industry?

Alzheimer’s disease is the most common form of dementia and represents one of the largest long-term care (LTC) insurance risks. What though if Alzheimer’s disease were curable? How would it reshape the LTC industry? Milliman’s Jeff Anderson and Thrivent Financial’s Matt Winegar in their article “After Alzheimer’s: What happens to long-term care insurance after a cure?”

IRS announces HSA and HDHP Adjusted Limits for 2018

The IRS recently published Revenue Procedure 2017-37, which provides the inflation-adjusted amounts for health savings accounts (HSAs) for calendar year 2018. The updated limits specify the maximum annual contributions to HSAs that may be tax deductible, as well as the minimum deductibles and the maximum out-of-pocket expenses allowed under qualifying high-deductible health plans (HDHPs).

The table below reflects the 2018 and 2017 values:

The “catch-up” contribution amount of $1,000 for individuals aged 55 or older was set by law and has not changed since 2009.

Annual out-of-pocket expenses include the HDHP’s deductibles, co-payments, and co-insurance, but not premiums paid by plan participants.

Employers that sponsor HSAs and HDHPs should review their programs and communications materials and plan for the updated limits for 2018.

For additional information about the 2018 updated HSA and HDHP limits, please contact your Milliman consultant.

How might healthcare reform 2.0 affect dental care benefits?

The Affordable Care Act (ACA) made pediatric dental care an essential health benefit that issuers must offer on state exchanges. If proposed changes to the ACA are enacted, the dental benefits industry must again determine how to proceed in an evolving landscape. In this paper, Milliman’s Joanne Fontana discusses several key components of ACA that, if amended or removed, would affect dental benefits. She also provides considerations for dental insurers that can turn another potential round of reform into opportunity.

Milliman Medical Index: Typical American family faces $26,944 in annual healthcare costs

Milliman today released the 2017 Milliman Medical Index (MMI), which measures the cost of healthcare for a typical American family of four receiving coverage from an employer-sponsored preferred provider plan (PPO). In 2017, costs for this family will increase by 4.3%—which marks the lowest rate of increase in the history of this study—though the total dollar increase of $1,118 is consistent with the last decade of healthcare cost increases.

“The good news is that we are seeing a record-low 4.3% cost increase in this year’s MMI,” said Chris Girod, co-author of the Milliman Medical Index. “The bad news: Continuing a 12-year pattern, healthcare costs for a typical family of four this year increased by more than $1,100.”

In recent years, the Milliman Medical Index has reported notable increases in pharmaceutical costs. Last year, drug costs increased by 9.1%. That rate of increase fell to 8% in 2017, which is still more than twice the rate of increase for all other components of healthcare spending.

“We’re seeing a smaller rate of increase for prescription drugs this year,” said Scott Weltz, co-author of the MMI. “But the longer view reveals a different story. Since we began tracking this data in 2001, prescription drug costs for the typical American family have increased from $1,111 to $4,612.”

This year’s MMI includes analysis of dynamics driving healthcare costs, including the sometimes elusive nature of rebates in drug pricing. While rebates often do not result in cost savings for consumers at the pharmacy, they still impact the larger cost puzzle.

The MMI is unique among health cost studies because it measures the total cost of healthcare services used by the family of four, including out-of-pocket expenses paid at time of service. The MMI also separates costs into portions paid by employer versus employee. This year, the employer pays $15,259 of a family’s total healthcare costs and the employee—through payroll deductions and cost sharing at the time of service—pays $11,685.

“Back in 2001, the first year we measured the MMI, employees paid 39% of healthcare costs,” said Sue Hart, co-author of the MMI. “This year, the family’s share of healthcare costs reached 43% of the total—a $11,685 total. We’ve seen a long, slow shift toward employees as these plans look to control healthcare costs.”

This year’s MMI includes discussion of the major components of the cost of care – payments to providers and the frequency and type of services used – and how they might vary outside the employer-sponsored system. Different discounts and payment mechanisms in the public markets can impact the costs for private insurers and therefore for the MMI family of four.

To view the complete MMI, click here.