Tag Archives: health insurance

Technological innovations offer health insurers business opportunities

Innovations in healthcare technologies have been growing, which is evident by the increasing attention of the venture capital industry. Health insurers can harness these technologies directly or indirectly in many ways that may result in increasing efficiency in operations, decreasing healthcare costs and improving customer satisfaction.

Most innovative solutions use the existing power of internet, mobile phones, 3D printing, artificial intelligence, machine learning and traditional information technology to create answers to industry-wide challenges.

In this paper, Milliman professionals discuss innovative solutions that can be harnessed directly by health insurers in different parts of the world. They classify healthcare technologies into three categories.

Health coverage options for the COVID-19 unemployed population

Over a five-week period in March and April, approximately 26 million Americans applied for unemployment benefits. As a result, many have lost their employer-sponsored health coverage. The U.S. healthcare system has never had to reenroll this many people this fast.

Fortunately, individuals facing changes in employment have several options for maintaining health coverage. However, navigating those options can be confusing. Among the options are COBRA, the Children’s Health Insurance Program (CHIP), and the Patient Protection and Affordable Care Act (ACA).

In this article, Milliman’s Les Kartchner and Troy Pritchett outline a road map that newly unemployed Americans may find useful as they sort out their options, offering perspective on potential factors that can be expected at the macro level.

Critical Point takes a look at potential COVID-19 healthcare costs

The COVID-19 pandemic will have far-reaching implications for both short- and long-term healthcare costs in the United States. One of the most important questions is how much will COVID-19 cost the healthcare system? Milliman consultants Pamela Pelizzari, Stoddard Davenport, Doug Norris, and Matt Kramer provide some perspective in this episode of Critical Point.

Equalising risk in global healthcare systems

Health insurance, like most insurance, can be priced using risk ratings, where premiums are set based on the relative risk of insured lives and the propensity to claim. This may result in unaffordable health insurance for the most high-risk members of society. As a result, many governments restrict the use of risk ratings in health insurance markets in favour of “community rating.”

In a community-rated system where all consumers are charged the same premium, many high-risk consumers are protected from paying unaffordable premiums. Other consumers, such as healthier or younger individuals, will generally pay a higher premium to subsidise sicker and often older individuals. Consequently, premium revenue collected by insurers or other risk-bearing entities may no longer truly reflect the underlying risk associated with their insured populations.

In many healthcare systems and health insurance markets around the world where risk rating is not allowed, risk equalisation is used to enhance consumer protection and market stability. Its aim is to compensate for the risk profiles of different groups of the population such that the additional medical expenses associated with high-risk members are shared amongst healthcare providers or insurance companies.

In this paper, Milliman consultants have set out a “how-to” guide to risk equalisation, or risk adjustment. They use illustrative examples from around the world to explain the challenges and practicalities that should be considered in the design and management of a risk equalisation program.

What does the health insurance landscape look like in China?

China ranks only behind the United States in total healthcare expenditures. It has at least 95% of its 1.4 billion people covered by basic, government-sponsored health insurance. But China’s annual per capita health expenditure is relatively low at around $425, or just over 5% of GDP, though it has been on the rise over the past decade.

In China, there are three types of publicly financed basic medical insurance: For the urban employed population, for the urban non-employed population, and for rural residents regardless of employment status. Funding of health coverage comes from the central government, local governments, employers, and the participants, and the level of funding varies by geographic area. On average, out-of-pocket spending accounts for 32% of China’s total health expenditures and varies greatly by geographic area.

China’s public insurance programs are facing pressure from all sides of the healthcare ecosystem. Population aging, urbanization, environmental issues, increasing disease burden due to chronic conditions and cancers, escalating unit cost in healthcare, waste, and low-value services are all adding to the growing demand for better and more efficient healthcare.

At the same time, the growth in social insurance funding, part of which is used to fund basic medical insurance, has slowed due to an aging population. And the role of commercial health insurance in China has changed significantly over the past 15 years and continues to evolve as the Chinese government implements reforms that affect the overall healthcare ecosystem.

To learn more about the health insurance market in China, read this article by Milliman’s Rong Yi and Sharon Huang, which discusses recent trends and how data and analytics could be used to address some of the challenges and support market growth.

Brief study of UK health insurers’ second SFCRs

This analysis by Milliman consultants compares information provided in Quantitative Reporting Templates (QRTs) and Solvency and Financial Condition Reports (SFCRs) and draws conclusions about the balance sheets and risk exposures of 15 UK private medical insurance and health cash plan providers. The analysis also highlights noteworthy trends between the 2017 and 2018 publications.