HealthCheck February 29, 2012


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February 29, 2012


Academy Activities

The Academy’s Medical Loss Ratio Work Group outlined concerns with excluding duration-related contract reserves from the medical loss ratio (MLR) calculation in a Feb. 14 letter to the Centers for Medicare & Medicaid Services.

Arizona’s regulatory definition of “qualified actuary” for health premium rate actuarial certifications is inappropriate, the Health Practice Council and the Committee on Qualifications stressed in a Feb. 10 letter to the Arizona insurance director. The letter—which is the second sent to the director on this issue—also suggested corrective language. The Arizona Administrative Code currently states that each rate submission must be certified by a “qualified actuary,” but the term is not defined in the code. The Arizona Department of Insurance instead relies on the definition contained in the statute governing the process for health insurance reserve filings. In a Feb. 23 Academy Alert, actuaries were urged to be aware of any issues pertaining to rate review requirements in states where they submit filings and to contact the Academy if they know of any state that has, or is considering adopting, a definition of “qualified actuary” that differs from the Academy’s suggested definition.

More than 1,800 actuaries from all practice areas attended the Feb. 10 webinar, The Affordable Care Act (ACA)—What Every Actuary Should Know. Members of the Health Practice Council provided information on the uninsured and pre-reform markets, highlighted various key provisions of the ACA, and discussed the implementation status of some of those provisions during the free 90-minute presentation. Click here to listen to a recording of the webinar and see the slide presentation.

The differences between the interim and final regulations for MLR reporting and rebates were the focus of the Medical Loss Ratios—Final Regulations and Repercussions for the Health Insurance Marketplace webinar on Feb. 8. The presenters also discussed insurer experiences to date, areas of uncertainty in MLR and rebate calculations and how regulators may respond, and implications for 2014 and beyond. More than 500 actuaries at 225 sites attended the 90-minute webinar sponsored by the Academy and the Society of Actuaries. To learn more and order the webinar, visit the SOA webinar page.

The Health Practice Council’s Actuarial Value Subgroup commented on a recently released research brief, Actuarial Value and Employer-Sponsored Insurance, in a Jan. 31 letter to the assistant secretary for planning and evaluation at the Department of Health and Human Services (HHS).

The Individual and Small Group Market Task Force commented on the Essential Health Benefits Bulletin released in December by the Center for Consumer Information and Insurance Oversight. The task force’s Jan. 31 letter to the HHS addressed issues related to benefit design flexibility, scope of benefits, mandated benefits, and actuarial equivalence.

Legislative and Regulatory Updates

check markThe U.S. House of Representatives on Feb. 1 passed HR 1173, which would repeal the Community Living Assistance Services and Supports (CLASS) Act. The CLASS program, enacted as part of the ACA, was designed to provide long-term care insurance on a voluntary basis and would have been funded entirely through insurance premiums with no taxpayer subsidies. The bill now goes to the U.S. Senate where the prospects for passage are less certain.

check markActuarial value and cost-sharing reductions were addressed in a Feb. 24 bulletin issued by HHS. The bulletin provides information on the approach HHS plans to use when defining actuarial value for qualified health plans and other non-grandfathered coverage in the individual and small group markets under the ACA. It also addresses the implementation of cost-sharing reductions under the ACA.

check markPresident Obama’s 2013 budget released on Feb. 13 includes several provisions aimed at improving the sustainability of the Medicare program, such as:

  • Allowing Medicare to obtain the same prescription drug rebates that Medicaid receives for low income beneficiaries

  • Increasing income-related Part B and Part D premiums

  • Increasing the Part B deductible for new beneficiaries

  • Introducing a Part B premium surcharge for new beneficiaries with Medigap coverage with low cost-sharing requirements

  • Strengthening the Independent Payment Advisory Board by lowering the target Medicare-per-capita cost growth rate.

In The News/Media Activities

In a Feb. 8 blog post examining consumer options for paying for long-term care, Steve Schoonveld, co-chairperson of the Joint Academy and Society of Actuaries CLASS Act Task Force, noted that average annual nursing home expenses range from $85,000 to $120,000 a year and that the cost of six hours a day of in-home care starts at around $40,000 a year.

In a wrap-up of amicus curiae filings in the challenge to the Patient Protection and Affordable Care Act of 2010 (PPACA), LifeHealthPro writes that the Academy brief “goes over arguments that cutting the individual mandate out of PPACA while continuing to require health insurers to sell coverage on a guaranteed-issue, mostly community-rated basis starting in 2014 would lead to sharp increases in coverage costs.”

Upcoming Health Care Reform Events

AHIP’s Summit on Payment Reform and Delivery Transformation

Summit: March 5, Washington (fee charged)

Sponsors: America’s Health Insurance Plans and Health Affairs

For a complete listing of upcoming and recent health care reform events click here.