The COVID-19 pandemic and the mitigating actions in response by citizens and governments alike have precipitated unprecedented economic disruption in the United States. The second quarter of 2020 marked the largest single-quarter economic contraction in modern U.S. history, driving unemployment rates from historically low levels in February to peaks last seen during the Great Depression.
The unraveling and recovery of the U.S. economy have had and will continue to have a similarly disruptive influence on the enrollment in and composition of U.S. health insurance markets. These impacts will be felt throughout the health system, including in state Medicaid budgets and hospital, physician, and pharmaceutical margins, as well as in the financial performance of commercial and Medicaid health plans.
To understand the interconnected nature of economic changes and health insurance coverage and to project impacts to U.S. health insurance markets, Milliman built a tool referred to as the COVID-19 Advanced Population Shift model. This model combines detailed information on the economic status, health insurance coverage, and health status of each state’s population prior to the COVID-19 pandemic with emerging information on the economic impact of the pandemic response. It allows forecasting the resulting shifts in enrollment and population morbidity across the healthcare markets while providing insight into the key factors driving change. Milliman’s Fritz Busch, Lindsy Kotecki, and Jeff Milton-Hall summarize the findings in this paper.
Although pricing actuaries are trained to project future
costs in environments of heightened risk, COVID-19 has introduced unprecedented
disruption and uncertainty. The pandemic has affected all aspects of the
healthcare industry and the American economy, altering the landscape in ways
that may both increase and decrease expected costs. This volatile and uncertain
environment also presents an extraordinary challenge for health plans
developing rates for 2021 commercial coverage.
This paper by Milliman’s Jeff Milton-Hall, Tom Murawski, and Doug Norris is intended to help commercial health plans navigate this evolving environment. The authors discuss key considerations for how the pandemic and its aftermath could affect the cost of health insurance coverage in 2021.
Congress continues to introduce tweaks to the Patient Protection and Affordable Care Act (ACA). One such bill, “H.R. 6311 – Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018,” could have major consequences for ACA plans if made into law, including exposing plans to significant rating risk if rates are not adjusted accordingly. This paper by Milliman’s Jason Karcher and Jeffrey Milton-Hall considers six features and potential outcomes of the bill that every individual ACA health plan should know.
If the cost-sharing reduction (CSR) subsidies of the Patient Protection and Affordable Care Act (ACA) were eliminated, it could expose insurance carriers to a substantial increase in selection risk related to their particular mixes of business. In August, the Centers for Medicare and Medicaid Services (CMS) announced its intention to propose a set of risk adjustment modifications for states in which insurance carriers raise silver premiums in response to potential CSR subsidy termination.
In this paper, Milliman’s Jeffrey Milton-Hall, Doug Norris, and Jason Karcher explore the CMS proposal along with the current ACA risk adjustment program and three other potential alternative modifications to risk adjustment in response to the possible elimination of CSR funding.