Critical Issues in Health Reform: Actuarial Perspectives from the Academy’s Health Practice Council

More than 45 million Americans are uninsured; health spending is at 17 percent of GDP and rising; and there is mounting evidence that the money being spent for health care is not providing enough value. These problems have pushed health care reform to the forefront of the domestic policy agenda.

As policymakers grapple with developing comprehensive reform proposals to slow the increase in health care costs, provide affordable and accessible coverage for the uninsured, and promote quality care, it’s important to understand the implications of the various proposals being considered, and their potential impact on the current health insurance market.

Actuaries bring a crucial and unique perspective to the health care reform dialogue. The role of the Academy’s Health Practice Council is to bring that actuarial perspective to the attention and aid of policymakers through the introduction of a new series of policy statements: Critical Issues in Health Reform. Below, you’ll find links to each of those informative statements, as well as other thought-provoking pieces on the wide-ranging subject of health care reform.

• Actuarial Equivalence [1]
• Administrative Expenses [2]
• Community Living Assistance Services and Supports (CLASS) Act [3]
• Gender Considerations in a Voluntary Individual Health Insurance Market [4]
• Health Insurance Cooperatives [5]
• Individual Mandate [6]
• Market Reform Principles [7]
• Merging the Small Group and Individual Markets [8]
• Minimum Loss Ratios [9]
• Premium Setting in the Individual Market [10]
• Public Plan Option [11]
• Risk Pooling [12]
• State-Level Impact [13] and State Characteristics [14]
• Transitioning Into New Markets [15]
• Value-Based Insurance Design [16]

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In addition to the Critical Issues on Health Reform, the following also address issues relevant to the current health care reform dialogue:

• Presentation [17] by Academy Senior Health Fellow Cori Uccello at American Enterprise Institute event on health care reform (June 15, 2010)
• Letter [18] to the NAIC regarding MLR considerations and potential disruption in the individual market (April 28, 2010)
• Letter [19] to the NAIC regarding medical loss ratio provisions in health reform law (April 20, 2010)
• Letter [20] to congressional leaders on Health Reform Implementation (March 24, 2010)
• Letter [21] to congressional leaders urging them to reconsider issues already approved in legislative form and to consider the implications of additional proposals to include in a reconciliation package as part of the health reform process (March 2010)
• Letter [22] to the White House and all invitees of the Feb. 25 bipartisan health summit stressing critical actuarial aspects of health reform legislation that will need to be addressed to support the stated goals of reducing the number of uninsured, increasing the availability and affordability of coverage, and enhancing the focus on quality of care and health spending growth (February 2010)
• Call to Action [23]: Actuaries Urge Comprehensive Medicare Reform (February 2010)
• Letter [24] to Speaker Nancy Pelosi and Senate Majority Leader Harry Reid highlighting some of the key differences on actuarial issues between the House’s Affordable Health Care for America Act (HR 3962) and the Senate’s Patient Protection and Affordable Care Act.
• Report [25] to help policymakers and the public understand the potential implications of an excise tax on high-cost employer-provided health plans.
• The Academy provides written testimony [26] to NAIC outlining several issues NAIC would need to address, in terms of implementation at the state level, if federal health care reform is enacted.
• The Academy hosted a webcast [27] for congressional staff and media to provide an overview of new research [28] on start-up capital requirements for health care cooperatives and/or a public plan option.
• Comments [29] on the "grandfathering provisions" contained in the Patient Protection and Affordable Care Act and whether they would mitigate “rate shock” for those individuals who keep the coverage they have.
• Letter [30] to Senators Harry Reid and Mitch McConnell, outlining key issues that need to be considered when evaluating whether the Senate’s health care reform bill will lead to a viable health insurance system and discussing whether the Patient Protection and Affordable Care Act addresses the outlined issues.
• Letter [31] to Speaker Nancy Pelosi and Republican Leader John Boehner providing an actuarial perspective on health insurance market reforms, outlining three criteria to ensure that the current markets remain viable, and offering comments on how certain provisions of the House’s Affordable Health Care for America Act (HR 3962) conform with those criteria.
• Issue brief [32]on Medicare Advantage payment reform.
• Analysis [33] by the Academy and Society of Actuaries of the proposed structure and funding approaches in the Community Living Assistance Services and Supports Act (CLASS Act). The analysis shows premiums may exceed affordable levels for those in the intended population of the CLASS Act and is unlikely to cover more than a very small proportion of the intended population.
• Testimony [34] to the U.S. House Committee on Ways and Means outlining three criteria to ensure that the current markets remain viable and offering comments on how certain provisions of the Tri-Committee bill conform with those criteria.
• Comment letter [35] on Senate Finance Committee’s policy options paper, Transforming the Health Care Delivery System.
• Comment letter [36]on Senate Finance Committee’s policy options paper, Expanding Healthcare Coverage: Proposals to Provide Affordable Coverage to All Americans.
• Webcast on Risk Adjustment (May 2009)
• Risk Classification in the Voluntary Individual Health Insurance Market [37] (March 2009 issue brief)
• Taking Control: An Actuarial Perspective on Health Spending Growth [38] (Sept 2008 issue brief)
• Health Insurance Coverage and Reimbursement Decisions: Implications for Increased Comparative Effectiveness Research [39] (Sept 2008 issue brief)
• Fundamentals of Insurance: Implications for Health Coverage [40] (July 2008 issue brief)
• Wading Through Medical Insurance Pools: A Primer [41] (Sept 2006 issue brief)
• Pay for Performance: Rewarding Improvements in the Quality of Health Care [42] (Oct 2005 issue brief)

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For more information or expert insights, please contact the Academy’s Senior Policy Analyst for Health, Heather Jerbi (jerbi@actuary.org).

To arrange an interview with a health policy analyst, please contact Andrew Simonelli, Assistant Director for Public Affairs (simonelli@actuary.org).