The medical loss ratio (MLR) measures a health plan’s spending on medical claims and allowable quality investments as a portion of total premium revenue net of taxes and allowable deductions. As a result of the COVID-19 pandemic, many healthcare services have been deferred and/or eliminated in 2020, leading to a reduction in 2020 claims relative to prior years. The claims reduction for the second quarter of 2020 was more pronounced due to lockdowns in most states.
Health plans have critical decisions to make in the upcoming months with limited data available and wide uncertainty on how the pandemic will transition toward the end of 2020 and into 2021.
In this paper, Milliman’s Andrew Bochner, Jennifer Carioto, and Luis Maldonado explore how COVID-19 can affect a health plan’s MLR requirements. They also provide specific considerations for the commercial, Medicare Advantage, and Medicaid markets in 2020 and beyond.
Health insurance markets in the United States are evolving with an increased emphasis on achieving the Triple Aim of improved patient experience of care, reduced healthcare costs, and improved population health. For health plans, that comes with an increased focus on quality standards and outcomes, and recognition that investment in quality accreditation is becoming essential to business success.
A growing number of state Medicaid contracts are requiring a focus on quality outcomes and quality accreditation by recognized accrediting organizations. One of these organizations, the National Committee for Quality Assurance (NCQA) continues to gain significance as Medicare and Medicaid increase quality requirements tied to NCQA. Regardless of the accrediting organization, achieving accreditation typically requires a significant commitment of time and resources, and follows a similar process.
In this paper, Milliman’s Barbara Culley, Penny Edlund, and Maureen Tressel Lewis provide information about the pursuit of quality accreditation as an essential investment that can have a positive impact on multiple health plan priorities, including quality of care, member satisfaction, and market viability.
Today, nearly every Medicaid state agency uses some form of managed care. The form that accounts for the majority of Medicaid enrollment coverage is risk-based managed care, with approximately two out of every three members enrolled with a comprehensive managed care health plan. Risk-based managed care is the mechanism in which Medicaid recipients receive healthcare benefits, at least in part, in 38 or more states in the United States, the District of Columbia, and Puerto Rico.
The introduction of the Medicaid expansion population in 2014 generated substantial increases in Medicaid beneficiaries, although enrollment levels are beginning to flatten out or even decrease in certain programs. The enrollment stabilization seen in recent years will likely be disrupted by the enrollment increases attributable to the COVID-19 pandemic during calendar year (CY) 2020, although the full impact on Medicaid enrollment is not yet known.
This report by Milliman’s Jeremy Palmer, Chris Pettit, and Ian McCulla summarizes CY 2019 experience for selected financial metrics of organizations reporting Medicaid experience under the Title XIX Medicaid line of business on the National Association of Insurance Commissioners (NAIC) annual statement.
Expected costs related to COVID-19 may increase or decrease health insurance premiums in the Patient Protection and Affordable Care Act (ACA) commercial markets. When setting premiums for 2021, health insurers will consider a variety of factors related to virus, including the acute treatment and vaccination for COVID-19, changes in access and demand for healthcare, lasting effects on population health, economic effects on enrollment and utilization of care, and other operational effects.
The National Association of Insurance Commissioners (NAIC) has released a template to assist state regulators in their reviews of 2021 premium impact assumptions for COVID-19. The template outlines a number of pricing considerations.
As of June 15, 2020, six states and the District of Columbia have publicly released preliminary ACA premium rates for 2021. This paper by Milliman’s Dane Hansen, Andrew Bochner, and Emily DeAngelis examines the reported impact of COVID-19 on these rates.
The scope of homelessness and
housing insecurity as an issue is substantial. According to the U.S. Department
of Housing and Urban Development 2019 point-in-time estimates, approximately
568,000 people around the country are homeless on any one night. Around
two-thirds stay in emergency shelters or transitional housing programs. The
remaining third reside in unsheltered settings.
Policy makers and Medicaid
administrators realize the value in achieving housing security for Medicaid
beneficiaries as a means of improving health outcomes and decreasing high-cost
healthcare services. Housing security is a social determinant of health,
playing a major role in influencing a person’s health and well-being. To that
end, the federal and state governments are pursuing ways to provide Medicaid
beneficiaries with a variety of housing-related services.
In this brief, Milliman’s actuaries and consultants explore the flexibilities available under Medicaid to address homelessness and housing insecurity, including Section 1115 Demonstrations Waivers and the new Healthy Adult Opportunity.
On January 30, the Centers for Medicare and Medicaid
Services (CMS) introduced guidance describing the new Healthy Adult Opportunity
(HAO) 1115 waiver option. This option outlines conditions under which a state
might convert open-ended matching funding for expansion adults into a block
grant or per capita program.
The HAO offers states new flexibilities for their Medicaid
programs in return for assuming the financial risk of block grants. State
program directors face many complex considerations as they evaluate these
options. While the HAO will clearly appeal to states that have previously
considered requesting a block grant, the range of policy options made available
under this initiative may bear considerations for states across the country.
In this paper, Milliman’s consultants discuss 10 key considerations for states evaluating the HAO.