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.
The requirement that every American have healthcare coverage or pay a financial penalty was one of the key provisions of the Patient Protection and Affordable Care Act (ACA). Known as the individual mandate, it was one of the most controversial provisions of the ACA. Some questioned its legality and others questioned its effectiveness at driving insureds into the insurance pool.
The U.S. Supreme Court settled the issue of the mandate’s legality in 2012, ruling that attaching a financial penalty to a failure to purchase health insurance did not run afoul of the U.S. Constitution. This decision, though, did not settle the issue of its effectiveness. And in late 2017, Congress enacted the Tax Cuts and Jobs Act, which reduced the financial penalty to $0 beginning with the 2019 mandate year, effectively eliminating the individual mandate.
Understanding the impact of this change on the health insurance risk pool is important to both insurers offering ACA-compliant products and state policy makers evaluating alternatives to the individual mandate. Health insurers—now in the process of setting rates for 2019—need to understand how elimination of the individual mandate penalty will affect future enrollment rates, which have a significant impact on rate projections. Some states are considering implementing state-based individual mandates, in some cases in conjunction with a Section 1332 State Innovation waiver.
In this paper, Milliman’s Andrew Bourg, Fritz Busch, and Stacey Muller discuss the significance of the individual mandate and model the impact of eliminating it.
In this report, Milliman’s Paul Houchens, Jason Clarkson, and Jason Melek provide a detailed review of the commercial health insurance industry’s financial results in 2016 and evaluate changes in the market’s expense structure and enrollment prior to relative years. They also provide enrollment and Advanced Premium Tax Credits estimates for 2017.
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 draft Notice of Benefit and Payment Parameters for 2019 was published in October 2017. In this rule, there is a significant change affecting dental benefit plans—removing Actuarial Value (AV) requirements for Patient Protection and Affordable Care Act (ACA)-compliant standalone pediatric dental plans. This change in policy provides new flexibility for dental issuers and closer alignment of pediatric dental benefits between standalone dental plans and pediatric coverage embedded within an ACA medical plan.
In this paper, Milliman consultant Joanne Fontana discusses this change and why it will be critical for dental issuers to understand and act on as the 2019 pricing cycle starts.
In 2018, the federal age curve of the Patient Protection and Affordable Care Act (ACA) is changing for the first time. As a result, ACA premiums for individuals under 21 years of age will increase. It is important for health insurers to develop a communications plan that will explain to members why their premiums are increasing.
In their article “Are health carriers ready to explain the 2018 age curve?,” Milliman’s Amy Giese and Nicholas Krienke outline the ways carriers can communicate with members. The authors also discuss some underlying issues carriers must consider to effectively communicate the age curve’s effect on premiums.