The Patient Protection and Affordable Care Act (ACA) introduced many changes to the individual health insurance market beginning in calendar year (CY) 2014, including new rating rules and federal financial assistance to purchase health insurance through the insurance marketplaces. It is important to understand the condition and stability of the individual health insurance market and how the ACA has affected its health insurance consumers.
To support this understanding, actuaries Paul Houchens, Jason Clarkson, and Zachary Fohl prepared Milliman’s second annual profile of the individual health insurance market for each state along with the District of Columbia (DC). The profile summarizes insurer financials, marketplace enrollment, and federal assistance provided to households purchasing insurance coverage through the insurance marketplaces, incorporating recently released data from the 2018 open enrollment period and early 2018 effectuated enrollment snapshot.
This information is vital for stakeholders for a number of reasons, including:
1. Future legislation or administrative actions. While the pace of new healthcare reform legislation will likely slow in 2018 with the upcoming mid-term elections, data from the individual marketplace can be useful in informing future policy decisions both at the federal and state level.
2. 1332 State Innovation Waiver (1332 Waiver). The information in our state profile reports can enable a state to better understand the funding and coverage requirements that must be adhered to under Section 1332 of the ACA.
3. Marketplace enrollment trends. One important measure of risk pool stability is enrollment.
4. Cost-sharing reduction (CSR) termination. From CY 2014 through the first nine months of CY 2017, insurers received direct federal payments for the cost of providing CSR variants. However, effective October 2017, CSR payments were terminated by the federal government.
To read the full article which summarizes 2018 individual market enrollment and ACA subsidies, click here.
In 2019, the Centers for Medicare and Medicaid Services (CMS) will begin partially calibrating the HHS-HCC commercial risk adjustment model using actual Patient Protection and Affordable Care Act (ACA) experience from the 2016 EDGE server data submissions. CMS has based the model solely on non-ACA data up to this point.
This article by Milliman’s Zach Davis, Phil Ellenberg, and Brian Sweatman contains four interactive exhibits that allow issuers to review coefficients from the 2019 model. They can also compare how the EDGE data incorporated into the 2019 model will affect risk scores, and the magnitude of the impact on an issuer’s risk adjustment transfer.
With the passage of the Patient Protection and Affordable Care Act (ACA) came a modification to how the true out-of-pocket (TrOOP) amount was calculated through 2019. With significant changes to Medicare Part D from the Bipartisan Budget Act of 2018 and the Centers for Medicare and Medicaid Services (CMS) Final Rule, one provision from the ACA that has gone largely unnoticed is the forthcoming TrOOP cliff in 2020, for which plan sponsors should prepare. Milliman actuaries Van Phan and Todd Wanta provide some perspective in this paper.
In February 2018, the Departments of Health and Human Services (HHS), Labor, and the Treasury released a proposed rule that would change the maximum duration of short-term, limited-duration insurance (STLDI) policies. Under the proposed rule, STLDI plans, or “short-term medical” plans, may emerge as an alternative form of individual health insurance. In this article, Milliman actuaries Jason Karcher and Nick Ortner discuss the proposed changes and the potential effect they might have on the individual health insurance market.
The Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States, signed by President Trump on October 12, could have a significant effect on both the individual and small group health insurance markets. The extent of any impact on either market will vary depending on how the executive order is interpreted and implemented by administrative agencies as well as whether those interpretations hold up to legal challenges.
This article by Milliman consultants Fritz Busch, Erik Huth, Nicholas Krienke, and Jason Karcher summarizes the executive order and analyzes key considerations and potential impacts for commercial health plans.
We generally consider living a long life an important goal, and it certainly does beat the alternative. But one side effect of getting older is that, as we age, we typically acquire additional acute and chronic medical conditions, and the prevalence of many common chronic medical conditions increases significantly. Age/gender rating is an area in which actuarial considerations are often in direct tension with social or public policy considerations: there is a natural tension between the policy goals of making coverage more affordable for older people (with higher average costs) and the goal of encouraging younger people (with lower average costs) to purchase health insurance coverage.
In an article first published in the magazine The Actuary, Milliman consultants Doug Norris, Hans Leida, Erica Rode, and Travis (T.J.) Gray explore how age and gender affect costs and premiums in commercial healthcare.