How may reinsurance and high-risk pools affect the individual market?

Milliman’s Paul Houchens and Fritz Busch will speak at this year’s National Conference on the Individual and Small-Group Markets hosted by America’s Health Insurance Plans (AHIP) on March 8 in Washington D.C. The consultants will talk about the role that reinsurance and high-risk pool programs may play in the individual market. The talk is based on their published paper “Reinsurance and high-risk pools: Past, present, and future role in the individual health insurance market.”

For more information about the conference, click here.

Improving financial projections for long-term care insurance with predictive analytics

In the world of long-term care (LTC) insurance, making financial projections is challenging for two main reasons: a long projection horizon and complex interactions. This article by Milliman actuaries Missy Gordon and Joe Long walks through the progression from developing LTC projection assumptions using traditional methods to doing so using predictive analytics.

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

Five ways the Amazon/Berkshire Hathaway/JPMorgan Chase deal could change healthcare in the U.S.


This week, Amazon, Berkshire Hathaway, and JPMorgan Chase announced plans to join forces in order to provide their U.S. employees with healthcare solutions that are “simplified, high-quality and transparent.” Large employers are growing increasingly frustrated with the challenge of providing their employees with affordable, high quality healthcare, and the announcement has many speculating that the partnership could disrupt the U.S. market.

Amazon, Berkshire Hathaway, and Chase bring a fascinating blend of perspectives to this area. And while we don’t know exactly how they will transform healthcare, we do have ideas of what could be possible (imagine a world where insurance claims might be a thing of the past). In this article, Milliman experts explore the ways in which healthcare could change as a result of this venture.

Regulatory roundup

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

Guide for electronically filing ACA Information Returns for software developers and transmitters
The Internal Revenue Service has published its Guide for Electronically Filing Affordable Care Act (ACA) Information Returns (AIR) for Software Developers and Transmitters (Processing Year [PY] 2018). The guide outlines the communication procedures, transmission formats, business rules, and validation procedures for information returns transmitted electronically through the AIR System.

For more information, click here.

Health insurance provider fee moratoriums released
The Internal Revenue Service have published questions and answers regarding the health insurance provider fees on its website. The posting offers perspective on several issues, including the following

• Under the 2019 moratorium, is there a health insurance provider fee in 2019?
• Must Form 8963 be filed in the 2019 fee year?
• Do the 2017 or 2019 moratoriums affect the 2018 fee year?
• Does the 2019 moratorium apply to fee year 2019 or data ear 2019?

For more information, click here.

Cost control measures for growing employer medical and pharmacy exposure

Rising prescription drug costs are old news. What is new, however, is just how high they have gone. Take the recent case of a member whose annual pharmacy spend is expected to exceed $7 million per year. That is the annual spend for one member. It turns out the medication is for a life-threatening, chronic, hereditary condition, and the medication will be needed for the remainder of the member’s life. This means no end in sight for the employer-sponsored insurance plan.

In the first year, the stop-loss coverage will cover the majority of this cost; however, there is the potential for a 40% to 60% increase in stop-loss premiums the following year, and even so, this member will be lasered out of any coverage in following years. In other words, the employer-sponsored health plan will be liable for this full amount going forward, plus any additional costs for this individual for medical or other pharmacy expenses (e.g., emergency room visits, hospitalizations, etc.).

Can employer-sponsored plans afford to absorb that kind of additional, annual spend in their healthcare budgets? In this particular case, the drug keeps the member alive, so not covering the medication is not an option, morally or ethically. But if this cost potentially bankrupts the plan, there will be no coverage for this member anyway.

So what can employers do to protect against this claim and others?

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Tax reform considerations for the LTC industry

What effects will the new tax reform law have on long-term care (LTC) insurance and other long-tailed health business? That is a question many actuaries are considering as they hurry to understand how it may affect these lines of business. In this article, Milliman’s Andrew Dalton and Al Schmitz provide an actuarial perspective concerning the immediate implications of the tax law. The authors also discuss how the law may alter the LTC marketplace broadly over the coming years.