Category Archives: Reform

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.

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

The fate of the Affordable Care Act’s (ACA) CSR subsidies – 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 co-pays and deductibles for qualifying individuals and families earning up to 250% of the federal poverty level 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, 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 one 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

This blog post first appeared on LinkedIn.

Budget proposal may effect Social Security Disability Insurance

President Donald Trump’s 2018 budget proposal includes potential changes to several Social Security Disability Insurance (SSDI) programs. If approved, these changes could affect claimants, state agencies, insurance companies, and/or employers. The Milliman Insight article “President Trump’s budget proposal calls for disability changes” by Jennifer Fleck explores the financial and administrative implications related to the proposed changes for each of these groups.

Here is an excerpt:

It is not yet clear which of the proposed changes are likely to proceed nor which can be considered benefit cuts as opposed to administrative changes intended to manage the existing program more closely. However, the potential impact is significant for many different constituencies.

• Current claimants or applicants now waiting for their claim decisions could be affected through reduced retroactive payments, increased opportunities for rehabilitation, or potential shifting of the payer of their benefits.
• State agencies should pay close attention to the proposed changes as they could require additional services be performed at the state level.
• Insurance carriers could be required to pay additional benefits to private insurance claimants as costs are shifted. Currently, group insurers offset their payments for SSDI benefits, so reduced SSDI benefits will result in higher payments from insurance companies. This has the additional impact of raising premium rates for everyone who has group disability insurance.
• Employers could be affected by cost shifting of workers’ compensation benefit offsets or by being required to accommodate more employees returning to work from disability. Employers could also face the higher premium payments mentioned above or could have higher benefit costs directly if they self-insure. This could discourage employers from offering coverage, cause a shifting of the cost to the employees, or encourage them to offer lower benefit amounts. A benefit to employers could be a larger potential workforce to draw from.

Overview of reinsurance and high-risk pools in the individual market

While there is significant uncertainty regarding current healthcare reform legislation, reinsurance and high-risk pool (HRP) programs are likely to play a role in attempting to stabilize individual market enrollment and premiums. In this paper, Milliman consultants Fritz Busch and Paul Houchens examine the following issues related to reinsurance and HRPs.

• The historical uses of HRPs prior to the implementation of the Patient Protection and Affordable Care Act (ACA)
• The role of reinsurance under the ACA, including emerging state-based programs developed using Section 1332 State Innovation Waivers
• The proposed usage of reinsurance and HRP under the American Health Care Act (AHCA), as passed by the House on May 4, 2017
• Considerations for states that are examining the creation and deployment of these types of mechanisms

Preexisting conditions and the effects on health insurance

Solving the preexisting conditions issue is a significant hurdle in healthcare reform. Making health insurance available to individuals with preexisting conditions – while also ensuring affordability in a system in which health insurance is optional – has proven to be very challenging so far.

In this article, Milliman’s Tom Snook discusses why the coverage of preexisting conditions is a key issue in health insurance, particularly with respect to affordability and sustainability, and outlines varying approaches to addressing it.

Affordable Care Act subsidies – how does your state benefit?

How much does your state benefit from ACA subsidies?

Milliman’s recently published 50-state profile of the individual health insurance market presents nationwide enrollment and subsidy data that can help states better understand the funding and coverage requirements under the Affordable Care Act. The infographic below sheds light on some of the 2017 results, including marketplace enrollment numbers by state, and a closer look at the ACA cost-sharing reduction (CSR) subsidies – for which government funding is currently under legal challenge.