The 2.1% Medicare fee-for-service (FFS) 2016 medical risk score trend was the primary driver behind the increase in the Part C FFS normalization factor proposed in the 2018 Advance Notice.
Milliman’s Darcy Allen, Karin Cross, and Robert Pipich conducted a risk score trend analysis, which is consistent with the trend in the Advance Notice. They also identified the six Hierarchical Condition Category (HCC) contributors shown in Figure 2 as the key drivers of the 2016 risk score trend. For more perspective, read their article “What’s driving the high risk score trend in the 2018 Advance Notice?”
Medicare Medical Savings Accounts (MSAs) have gained some traction in recent years, and may become an attractive alternative to traditional Medicare Advantage (MA) plans. Insurers that offer these products can potentially increase their market share by capturing new working-age beneficiaries. In this article, Milliman’s Rob Pipich and Ruokai Chen highlight some key information regarding MSA plan benefits and provide an example of how such a plan works. They also provide a comparison of a Medicare MSA plan and MA plan.
The Patient Protection and Affordable Care Act (ACA) excise tax on high-cost insurance plans, known as the “Cadillac tax,” is a narrowly targeted source of funding that the Congressional Budget Office (CBO) has projected to be a significant source of revenue. The calculations involved in projecting the future burden of the Cadillac tax are complex and will become a necessary part of human resources benefit planning, union negotiations, and other postemployment benefit (OPEB) valuations. Milliman consultants Rob Pipich and Chris Ruff provide some perspective in this article.
According to a survey by Americas Health insurance Plans (AHIP) the number of individuals insured by high-deductible health plans (HDHPs) in conjunction with health savings accounts (HSAs) grew 18.4% this year to 13.5 million from 11.4 million in 2011. AHIP data shows that this type of consumer-driven health plan (CDHP) has increased gradually since it was introduced in 2004. Read more about AHIP’s survey at Workforce.com. You can also read the entire survey here.
One question arises from the aforementioned survey: Do CDHPs help reduce costs? Jack Burke and Rob Pipich’s detailed analysis on high-deductible plans found that when adjustments are made for typical risk and benefit factors, CDHPs deliver cost savings that are modestly better than non-CDHPs. Here is an excerpt:
“Most employers we examined showed savings in the CDHP plan before adjusting for risk and plan design characteristics; however, the bulk of the apparent savings was explained by these adjustments. After adjustments, the reduction in combined employer and employee costs averaged 4.8% before accounting for the utilization-dampening impact of the high deductible. Accounting for the high deductible made the reduction 1.5%. Some employers showed significantly greater reductions.”
This 1.5% reduction is what’s known as “induced utilization” and is a key element of CDHPs. For more, read Milliman’s complete Consumer-Driven Impact Study.
An op-ed by the dean of the NYU Dental School asked that dental care not be left out of healthcare reform. Dental care is often overlooked (kind of like flossing), but it does have larger health implications than just what goes on in your mouth.
A recent white paper by Darcy Allen, George Berry, and Rob Pipich outlines the case for integrating dental care as part of the larger view of a patient’s health. While some insurers have started to recognize the symbiotic relationship between dental health and general medical health, few have taken advantage of it. Regardless of merit, dental health is perhaps a longshot as a healthcare reform priority.