Tag Archives: Stacey Muller

How will the elimination of the individual mandate affect enrollment rates?

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.

Results from the Actuarial Challenge: The Individual Health Market

The Robert Wood Johnson Foundation (RWJF) and the actuarial and consulting firm Milliman announce the results of the Actuarial Challenge: The Individual Health Market, a collaborative event for health actuaries to test different approaches to increase stability in the individual health insurance market.

The Actuarial Challenge elicited innovative ideas and proposals from informed actuaries to move the individual health insurance market further toward the goal of universal access to quality health services and providers in a financially secure and stable way. Actuaries considered the costs the solution places upon individuals, employers, healthcare providers, taxpayers, and other health sector stakeholders.

The results of the Challenge are now available. Fourteen proposals were submitted by teams of actuaries. A panel of actuarial judges chose five for which simulation modeling was conducted by Milliman. The results for those five proposals indicate the possibility of a significant drop in the number of uninsured people under four of the proposals and reductions in total out-of-pocket costs (premium and benefit cost-shares) from 6% to 45%.

“The release of the Challenge results is timely, given the current prominence of individual market reform as a policy issue,” said Katherine Hempstead, Senior Advisor at the RWJF. “Actuaries have a unique perspective and expertise, and there are aspects of these proposals that are highly relevant to current policy discussions.”

The analyses illustrate the impact of each proposal on health plan issuers, healthcare providers, employers, and on funds needed from government or other sources to make these reforms successful. Results are shown on both a total dollar basis and a per member basis.

The American Academy of Actuaries and the Society of Actuaries, the two largest professional actuarial organizations in the nation, helped promote the Challenge among their members.

Rebecca Owen, Health Research Actuary with the Society of Actuaries, who also served as one of the judges for the Challenge, stated, “The Actuarial Challenge has been a great opportunity for actuaries to make their voices heard and ideas for reform considered as part of the important national discussion on improving and stabilizing the individual health market.”

Jim O’Connor, a principal with Milliman, cautioned, “In evaluating each proposal, it is important to not only consider how much premiums are reduced, but also how those reductions can be achieved and how other important stakeholders in our healthcare system are affected.”

Those interested in more information about the Actuarial Challenge, the results mentioned above, and the specific proposal papers submitted by each participating team should visit the Actuarial Challenge website or contact the Challenge here.

The proposals expressed in the submitted papers do not necessarily reflect the views of the Robert Wood Johnson Foundation, Milliman, the American Academy of Actuaries, the Society of Actuaries, or the employers of the Actuarial Challenge participants, and should not be viewed as an endorsement by any of these organizations.

A challenge to move the marketplace forward


The Patient Protection and Affordable Care Act (ACA) brought extensive changes to the health insurance market. Accolades as well as concerns have been raised by stakeholders as the marketplace evolves under the new structure. While policy-makers and politicians analyze the strengths and weaknesses of the individual health insurance marketplace, the Robert Wood Johnson Foundation is working with Milliman, among the world’s largest providers of actuarial services, to identify potential improvements to increase its stability.

In partnership with the American Academy of Actuaries and the Society of Actuaries (SOA), the Actuarial Challenge urges health actuaries to propose new ideas and different approaches to increase stability in the individual health insurance market, further moving the market toward universal access to quality, affordable health services. The potential Challenge participants include, but are not necessarily limited to, actuaries employed by:

• Health insurance companies and health maintenance organizations (HMOs)
• Regulators
• Healthcare providers (health systems, hospitals, physician groups)
• Pharmaceutical companies and pharmacy benefit managers (PBMs)
• Actuarial professional organizations
• Health actuarial consultants
• Colleges and universities with actuarial science programs

But before proposals are developed, teams compete, and finalists are
selected for simulations, potential Challenge participants are invited to join the #ActuarialChallenge Twitter chat on Friday, October 21, 1 p.m. ET.

Hosted by @MillimanHealth and @RWJF_Live, several experts will lead the chat:

• Joel Ario, Managing Director, Manatt Health
• Kathy Hempstead (@KHemp64), Senior Advisor, Robert Wood Johnson Foundation
Stacey Muller (@StaceyMullerFSA), Principal and Consulting Actuary, Milliman
Jim O’Connor (@JimOConnorFSA), Principal and Consulting Actuary, Milliman

Despite millions of Americans gaining health insurance coverage in the last several years, healthcare costs have continued to increase, provider choice has become increasingly restricted, and, in some cases, the quality of provider networks have come into question. You can help explore new approaches that can increase stability in the health insurance marketplace during the Twitter chat on October 21. Follow the Twitter hashtag #ActuarialChallenge.

Operation of a health exchange within the PPACA

The Patient Protection and Affordable Care Act (PPACA) mandates that each state have a health exchange in place by January 1, 2014. These exchanges will be either of the state’s invention or under the aegis of the federal Department of Health and Human Services. This paper, the latest in a series of papers on exchanges, addresses the functions of an exchange and examines various operational considerations.

State exchanges are coming–what are today’s considerations?

The state healthcare exchanges that will be created as part of the Patient Protection and Affordable Care Act are intended to bring buyers and sellers together in a single marketplace for qualified health insurance. While the idea of a single marketplace is relatively straightforward, there are numerous underlying complexities, including plan cost, affordability, access, group size, participant age, marketing and education, eligibility, plan qualification, and risk adjustment. States that plan to establish exchanges should be well aware of these issues and should determine the best course of action depending on their specific circumstances. A new briefing paper examines these dynamics.