Repeal, replace, or reform: Key policy discussions affecting the individual health insurance market

How might the Patient Protection and Affordable Care Act (ACA) be affected by the incoming Trump administration? The new administration and the Republican party are considering a number of policy ideas regarding ACA’s repeal, replacement, and reform. In this article, Milliman’s Scott Weltz, Fritz Busch, and Nick Krienke highlight key policy discussions to monitor that will have a significant impact on individual health insurers.

This is the first in a series of papers Milliman will publish as the country contemplates another round of healthcare reform. We have also compiled a reading list of relevant papers from our ongoing analysis of the ACA. To view that library, click here.

Increases in self-insured employers and stop-loss coverage

Under a self-insured group health plan an employer shoulders the financial risk for providing healthcare benefits to its employees. Stop-loss insurance can help an employer mitigate the risk associated with high-cost or catastrophic health claims.

While large employers have customarily self-insured, small and mid-sized employers have increasingly weighed the benefits of self-insurance since the passing of the Affordable Care Act (ACA), spurring growth in the loss-stop market. In this article, Milliman’s Mehb Khoja discusses ACA’s impact on self-insurance and on stop-loss coverage.

Here is an excerpt from the article:

The stop-loss market is believed to be a roughly $15 billion industry, up from $8 billion to $10 billion pre-ACA. Its growth is related to the increased prevalence of self-funding along with the changes from ACA which increased premiums, plan enrollment, or both for stop-loss insurance carriers….

… ACA has considerably increased the need for and expanded employer interest in stop-loss coverage due to several factors:

• Removal of annual and lifetime maximums (prior to ACA, a cap on annual expenses on an employer-sponsored plan was common and allowed stop-loss insurance carriers to limit their exposure).
• Removal of pre-existing condition exclusions (prior to ACA, employers could temporarily exclude high risk members).
• The individual mandate and extending dependent coverage to age 26 have all increased membership in employer-sponsored plans.
• Expanded taxes on fully insured health plans.

A tale of two national health plans

The United Kingdom’s National Health Service (NHS) and the United States’ Medicaid program both provide publicly funded medical services to a broad population. The general goal of both is to find a balance of quality and efficiency that promotes access to appropriate and financially sustainable medical care. This article written by Milliman consultant Jennifer Gerstorff and Northampton General Hospital’s Chris Pallot explains the history of both programs. The authors also compare and contrast how the programs are funded, how providers are contracted, and how innovations are changing each system.

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Technical guidance for self-insured health plans on federal external review process
The Department of Health and Human Services issued “Technical Guidance – Standards for Self-Insured Non-Federal Governmental Health Plans and Health Insurance Issuers Offering Group and Individual Coverage.” This release replaces the technical guidance issued June 22, 20111 with standards adopted in the final regulation at 76 FR 37208 that further define requirements under Public Health Service Act (PHS Act) section 2719(b)(1).

For more information, click here.

Agencies issue ACA FAQs, Part 37
The Departments of Treasury, Labor, and Health and Human Services released frequently asked questions (FAQs) Part 37 regarding Affordable Care Act (ACA) Implementation. The FAQs highlight: Health reimbursement arrangements; integration of HRAs with group health plans sponsored by the employer of a spouse of an employee; Code Section 162(m)(6); and more.

To read the FAQs, click here.

DoL issues FY 2016 MHPAEA enforcement fact sheet
The Employee Benefits Security Administration (EBSA) enforces the law governing 2.2 million private employment-based group health plans, which cover 130.8 million participants and beneficiaries. EBSA relies on its 460 investigators to review plans for compliance with ERISA, including the Mental Health Parity and Addiction Equity Act (MHPAEA). EBSA released its first annual MHPAEA enforcement fact sheet, summarizing its enforcement activity in fiscal year (FY) 2015.

To read the fact sheet, click here.

Medicaid encounter data: The next national data set

Quality encounter data is necessary for successful Medicaid managed care programs. States and managed care organizations have partnered to work toward solutions for developing and transmitting complete and accurate encounter data. In this article, Milliman’s Jennifer Gerstorff and WellCare Health Plans’ Sabrina Gibson discuss the need for, and challenges of, collecting Medicaid encounter data as well as the future of Medicaid encounter data.

Copyright © 2016. The Society of Actuaries, Schaumburg, Illinois.
 Reproduced by permission.