HealthCheck, July 2015

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July 8, 2015

Academy Activities

On July 6, the Academy’s Health Practice International Committee released a new issue brief that examines wellness initiatives in several different countries—India, Israel, Japan, South Africa, Mexico, the United States, and the United Kingdom—and explores some of the results and implications from these case studies.


The Academy issued a statement on June 25 following the ruling in King v. Burwell, saying that the Supreme Court’s ruling upholding federal premium subsidies in states participating in the federally facilitated marketplace preserved an integral component of the Affordable Care Act (ACA) and averted significant disruptions to the individual health insurance market.

“The ACA’s premium subsidies work together with the individual mandate as incentives for even individuals in good health to obtain coverage,” said Senior Health Fellow Cori Uccello. “Had the court’s majority decided differently, the federal-marketplace states would be facing significant disenrollment of those who cannot afford insurance without the subsidies, and the consequences of that could have threatened the viability of those markets. In the loss-of-subsidy scenario, adverse selection would have been a serious concern, as relatively higher-cost individuals would have retained coverage, increasing average costs and premiums.

“While the legal challenge to subsidies has been decided, the Academy urges policymakers to assess any proposals that may be offered to modify or replace the ACA against important market reform principles” outlined in the Health Practice Council’s issue brief, Implications of Proposed Changes to the ACA in Response to King v. Burwell, said Uccello.

Legislative/Regulatory Updates

check markOn June 16, the departments of Health and Human Services, Labor, and Treasury published the final rule for the summary of benefits and coverage and uniform glossary for health plans under the ACA.

check markOn June 18, the NAIC Health Actuarial (B) Task Force exposed a draft of proposed additions to VM-25 (Health Insurance Reserves Minimum Reserve Requirements) to incorporate the 2012 Group Long-Term Disability Valuation Table into the Valuation Manual. Comments are due Monday, July 20.

check markIn June, the U.S. House of Representatives passed a series of bills related to Medicare, including legislation to repeal the medical device tax, establish a three-year demonstration program within Medicare Advantage (MA), and make other MA changes (H.R. 2505 - Medicare Advantage Coverage Transparency Act of 2015; H.R. 2507 - Increasing Regulatory Fairness Act of 2015; H.R. 2582 - Seniors’ Health Care Plan Protection Act of 2015).

check markOn June 23, the U.S. House passed H.R. 1190, Protecting Seniors’ Access to Medicare Act of 2015, which would repeal the Independent Payment Advisory Board (IPAB). While it is unclear whether the Senate will vote on this legislation, the president has said he will veto it should it reach his desk.

check markOn June 25, the U.S. Supreme Court ruled in a 6-3 decision to affirm the decision of the U.S. 4th Circuit Court of Appeals in King v. Burwell regarding ACA subsidies in states participating in the federally facilitated marketplace. The decision upholds the availability of subsidies to individuals in those states.

check markOn June 30, the Center for Consumer Information and Insurance Oversight (CCIIO) released a summary report detailing reinsurance payments and risk adjustment transfers for 2014.

In the News/Media Activities

As lawmakers prepared to address the possible elimination of federal premium subsidies in states participating in the federally facilitated marketplace in the wake of the King v. Burwell case before the Supreme Court, the Academy’s issue brief, Implications of Proposed Changes to the ACA in Response to King v. Burwell, served as a valuable resource to media outlets reporting on that possible outcome.

  • A front-page New York Times article directly cited the issue brief in its reporting of Capitol Hill activity leading up to the ruling. The Times quoted the Academy’s brief: “An immediate or near-term elimination of federal premium subsidies would cause massive disruption in the individual market. Potentially millions of people would drop coverage, and the average costs of those remaining insured would soar.”
  • Other sources that cited the issue brief in the days prior to the court’s ruling in King v. Burwell include Daily KosHouston Public Media, The Center for American Progress Action Fund, and Avalere Health.

Media outlets across the country again turned to the Academy following the Supreme Court’s 6-3 decision in King v. Burwell that upheld ACA premium subsidies in states participating in the federally facilitated marketplace:

  • Senior Health Fellow Cori Uccello was quoted in Modern Healthcare, saying, “This avoids the likely kind of chaos that would’ve resulted in a ruling for King.” Uccello also weighed in on some challenges that remain even after the court’s decision: “Everyone’s adjusting to the new program and the shifting dynamics, and we’re still not at the steady equilibrium of enrollment and premiums. …There’s still some uncertainty in the rate development process.”
  • Other reports that cite the Academy in the wake of King v. Burwell include:

JD Supra mentioned the Academy in a story examining the Centers for Medicare & Medicaid Services’ (CMS) proposed new rule for Medicaid managed care regulations. The story notes that the proposed rule would require Medicaid managed care rate setting to be actuarially sound and quotes from the Academy’s Actuarial Soundness report, issued in 2012, which states, “There is no federal regulatory requirement that rates be actuarially sound for a particular MCO [managed care organization]. ...An MCO reasonably could decide to accept rates for a particular year, knowing that it expects an underwriting loss in that year. Such a decision may be a reasonable business decision, given that the MCO is entering a new market or expects underwriting gains to emerge in the future.” The story also ran in Mondaq.

Bloomberg BNA and America’s Health Insurance Plans Coverage reported on the Capitol Hill panel discussion, “ACA Premiums For 2016: What’s the Deal?” hosted by Third Way, at which Senior Health Fellow Cori Uccello represented the Academy in discussing factors influencing insurance premiums for next year.  The Bloomberg BNA subscriber-only story quotes Uccello on continuing uncertainty in premium rate setting due to incomplete market information. “Although plans have information on their 2014 experience, they don’t have information on the experience of the market as a whole,” said Uccello. “They still didn’t have that information, so there’s still uncertainty.”

Other work from the Health Practice Council gaining media attention last month included the issue brief Potential Implications of the Small Group Definition Expanding to Employers with 51-100 Employees. It was linked to a Commonwealth Fund Blog post that explores the implications of the ACA provision.

A Health Affairs Blog post examining CMS’s proposed new rule for Medicaid managed care noted that “CMS proposes to adopt the American Academy of Actuaries approach” regarding actuarially sound capitation rates.


Upcoming Health Care Reform Events

Dual Eligibles Summit
Conference: July 14-16, The Weston Crystal City, Arlington, Va. (fee charged)
Sponsor: World Congress

6th Annual Public and Private Exchange Summit
Conference: July 15-16, The Weston Crystal City, Arlington, Va. (fee charged)
Sponsor: World Congress

Save the Date for Two International Webinars

Join us for the next two webinars in our series on health care cost drivers across the globe, which will provide a unique opportunity to learn about the successes and challenges that various countries have experienced as they have worked to identify and address particular cost drivers.

  • Exploring Global Health Care Cost Drivers: Australia and Singapore 
    Webinar: Wednesday, Sept. 2 (for U.S. participants), 8:00 p.m. EDT (no fee charged for Academy members)
  • Exploring Global Health Care Cost Drivers: Canada and Chile
    Webinar: Wednesday, Nov. 4, 10:00 a.m. EST (no fee charged for Academy members)

Sponsor: American Academy of Actuaries and the International Actuarial Association Health Section

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