Category Archives: Issuers

International private medical insurance strategies and the impact of COVID-19

The international private medical insurance (IPMI) market has recorded significant growth in recent years. Several trends have led to a US$16 billion industry, headed by a number of established insurance players and an increasing number of new entrants looking to grab market share in this highly specialised insurance market.

As most players in this sector have come to realise, winning in this highly competitive segment requires very specific skills sets and capabilities in order to ensure competitive offerings, pricing, medical servicing, and supporting infrastructure. The COVID-19 pandemic adds additional levels of uncertainty to IPMI market participants given the high dependency of the sector on international mobility and travel as well as related effects on health claims costs and expenditures.

In this paper, Milliman’s Joanne Buckle and Peter Gregor examine the strategies and business models adopted by leading players in IPMI as well as the key success factors and capabilities required to win and to sustain profitable growth in a post-COVID-19 world.

Obtaining and employing data for insurance innovation

Insurers that innovate typically have a significant advantage over those whose products blend into the background. Data is a key component when attempting to identify opportunities and quantify the impact of innovative ideas. Whether pricing new benefits or trying to understand the effectiveness of new services and tools, data is necessary to assess value.

In her article “Harnessing the power of data,” Milliman consultant Ashlee Borcan discusses where insurers can get public and private sources of data. She also provides perspective on what happens if that data is imperfect or not what carriers are looking for.

The article is part of Milliman’s Innovate to Win series.

How can medical management teams help enhance their health plan’s COVID-19 response?

The COVID-19 pandemic has the potential to significantly disrupt and challenge the healthcare delivery system, including health payers. It also presents opportunities for payers to leverage internal resources and deliver value for their provider partners and customers.

Traditionally, the U.S. healthcare system is bifurcated into two major types of organizations: those that deliver healthcare services and those that finance or fund the delivery of healthcare services. There are a few areas where there has been some convergence of these key functions. In particular, the introduction of risk contracts has moved provider organizations closer to the financing end of things and the growth of medical management has moved some payers closer to care delivery.

In this brief, Milliman’s Penny Edlund and Maureen Tressel Lewis highlight some areas where a health plan’s medical management team may contribute to the COVID-19 response.

Too high or too low? Health insurers need adequate capital levels

Capital and surplus requirements for a health insurer can change over time based on many internal and external factors. Regulators generally focus on the solvency of health insurers to ensure they meet obligations to consumers. However, a health insurer with capital levels that are significantly above the regulatory minimum may also get a lot of attention from regulators and stakeholders. A health plan’s target capital requirements are generally significantly higher than the regulatory minimums.

In this paper, Milliman’s David Hayes, Rachel Killian, and Shyam Kolli discuss considerations for health plans when determining capital requirements.

Supplemental health benefits considerations for small insurers

Supplemental health products have experienced consistent market growth over the years, most noticeably since the implementation of the Patient Protection and Affordable Care Act (ACA). This growth has been especially strong for hospital indemnity, critical illness, and accident products. There has been a significant increase in the number of insurance companies selling these products. Small companies in this market need to understand the unique challenges these products present in order to compete effectively.

Understanding the market landscape and the assumptions that are required in order to develop premium rates for supplemental health products is important. Three areas that create rate challenges for insurers in supplemental health markets are (1) states with high minimum loss ratio requirements, (2) ongoing monitoring requirements, and (3) the need for rate flexibility. Insurers also need to be aware of the volatile regulatory environment and need to consider issues regarding product flexibility and distribution.

This article by Milliman’s Jennifer Howard and Stacy Koron goes into more detail on the challenges that supplemental products can present.

A review of the ACA’s risk adjustment validation program

The U.S. Department of Health and Human Services established risk adjustment data validation (RADV) as a mechanism to protect risk adjustment integrity by assessing certain data elements supporting risk transfers. Issuers in the individual and small group insurance markets seemed to be optimistic heading into the 2017 audit following the prior years’ RADV pilots. While most achieved a 0% error rate, many still experienced unfavorable 2018 risk adjustment transfers. In this paper, Milliman’s Cameron Gleed, Jason Karcher, and Jason Petroske discuss what happened.