Heeding the call for transparency

The overall share of the U.S. economy devoted to healthcare spending reached almost 18%1 in 2015. As a result, methods for cost reduction are getting increased attention. The new administration under President Trump, identified provider price transparency as one of its key healthcare reform goals. Until now, disclosure of provider rates has been very limited due to the confidential nature of this information and concerns with provider collusion. However, rising trends, coupled with the demand for increased consumerism by employer plan sponsors, have started to move the transparency needle a bit. The following provides an overview of price transparency, including the primary drivers in the self-insured market and a short list of employer considerations.

What does price transparency means?
In terms of the self-insured market, price transparency means making information more readily available to consumers. This will allow them to make better-informed decisions based on their current health status. Several carriers and independent companies have created tools to assist employees with “de-mystifying” medical rates in a consumer-centric manner. These tools allow employees to price-shop for a given service by provider, as well as factor in current benefits to estimate their out-of-pocket cost.

What factors are driving the need for transparency in the self-insured market?
The proliferation of High Deductible Health Plans (HDHPs), reference-based pricing, and narrow or custom networks all place a greater burden of cost sharing and decision-making on the employee and employer.

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Industry’s profitability declines slightly while maintaining overall favorable results

While on a downward trend, movement in the medical professional liability (MPL) industry has occurred at a relatively slow pace. Surplus grew slightly in 2016, leaving the MPL industry in a financial position roughly consistent with where it has been for the past half-decade. Milliman consultants Chad Karls and Susan Forray provide more perspective in their recent Inside Medical Liability article.

Exploring the nuances of MACRA

The major terms and conditions of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) are becoming more well-known during the first performance year, but some aspects of the new physician payment system law still can be elusive for physician practices and other healthcare organizations. In this article, Milliman’s Pamela Pelizzari discusses details that may be overlooked regarding participation in the Merit-based Incentive Payment System track and the advanced alternative payment model track of MACRA.

This article was published by the Healthcare Financial Management Association.

Recouping past LTC policy losses

The National Association of Insurance Commissioners (NAIC) is continuing to ensure that past long-term care (LTC) insurance losses are not recouped through rate increases. Some regulators have asked LTC companies to justify premium rate increases in part by assuming that the proposed rate increase had been in place from the beginning. However, an NAIC task force ultimately decided that this reasoning added pricing risk by not allowing companies to seek the appropriate premiums levels needed to maintain the future financial health of LTC policies. In his article “Recouping past LTC losses,” Milliman consultant Robert Eaton provides examples illustrating how this pricing risk may influence claims losses in future years. He also offers perspective on the NAIC’s LTC Model Regulation update.

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.