Academy Activities

The Academy’s Health Practice Council (HPC) gave a March 9 briefing on Capitol Hill in Washington to policymakers and congressional and federal agency staff, offering an actuarial perspective on prescription drug costs in the U.S. health care system. They discussed the Prescription Drug Work Group’s new issue brief on the subject, released March 7, which highlighted cost drivers, the effect on various stakeholders, and possible approaches that might help address the health care cost growth associated with prescription drugs. The briefing capped the HPC’s annual Capitol Hill visits on March 8–9, where volunteer members met with staff from congressional offices and federal agencies. Much of this year’s discussion focused on efforts to stabilize the individual market and on the proposed rules on association health plans (AHPs) and short-term, limited-duration insurance.

The Group Long-Term Disability (LTD) Practice Note Work Group published a public policy practice note March 12 on some of the current practices used by health actuaries in the United States for determining actuarial reserves and liabilities for group LTD income business.

The Individual and Small Group Markets Committee sent comments on March 5 to the U.S. Department of Labor (DOL) on proposed rules regarding the definition of ‘‘Employer’’ under section 3(5) of ERISA–AHPs.

The HPC sent comments to the Idaho Department of Insurance on March 2, regarding allowing health insurers to offer state-based plans that are not compliant with the Affordable Care Act (ACA) in the state.

The High-Performance Network Work Group on Feb. 27 released a new issue paper, High-Performance Networks. Drawing on recent public policy debates about addressing health care spending, the paper explores the expansion of high-performance networks (HPNs) which generally focus on delivering high-quality and efficient care, as a potential solution.

Members of the Individual and Small Group Markets Committee on Feb. 23 held a teleconference with the U.S. Government Accountability Office for a study on health insurance exchange operations.

Academy Publishes Statement on U.S. District Court Decision Involving ASOP 49

The Academy issued a news release March 13 explaining that a recent decision issued by the U.S. District Court for the Northern District of Texas regarding a U.S. Department of Health and Human Services (HHS) regulation on actuarially sound Medicaid payments to managed care organizations (MCOs) mischaracterizes the role of the Actuarial Standards Board (ASB). The ASB is not a party to the case (Civil Action No. 7:15-cv-00151-O) filed by several plaintiff states against defendant HHS over the payment of the ACA’s health insurer providers fee. The recently issued decision discusses Actuarial Standard of Practice (ASOP) No. 49, Medicaid Managed Care Capitation Rate Development and Certification, at length, and erroneously states that the ASB decrees what states must do. The news release states that, in fact, the ASB does not have the authority to and does not promulgate federal or state laws or regulations. ASOPs may sometimes refer to federal or state laws and regulations but do so only to provide the legal references with which actuaries, and all others, must comply.

Legislative/Judicial/Regulatory Updates

The Centers for Medicare & Medicaid Services (CMS) on March 5 approved a Section 1115 Medicaid waiver request by Arkansas that includes work requirements as a condition of Medicaid eligibility. CMS also denied a provision in the request that would have lowered income limits for Medicaid eligibility from 138 percent of the federal poverty level to 100 percent.

The U.S. District Court for the District of New Mexico ruled on Feb. 28 that HHS incorrectly assumed that risk-adjustment formulas should be budget-neutral under the ACA. The court found that “HHS’ use of statewide average premiums in its risk adjustment methodology is not contrary to law, but is arbitrary and capricious,” and vacated HHS’ rules for assessing payments to insurers under the risk adjustment program.

Wisconsin Gov. Scott Walker signed a bill into law (S.B. 770) on Feb. 27 directing the state to seek a Section 1332 State Innovation Waiver in order to establish a reinsurance program.

Twenty states filed a lawsuit in a U.S. District Court on Feb. 26 against HHS and the IRS over the constitutionality of the ACA. The lawsuit, which cites the December 2017 elimination of the ACA’s tax penalty for individuals without health insurance coverage (known as the individual mandate), claims that the ACA is no longer constitutional and should be repealed. Read the Academy alert.

The IRS, DOL, and HHS released a proposed rule on Feb. 22 that would allow individuals to be covered by short-term health insurance plans, which are not required to comply with the requirements of the ACA, for a period of up to 12 months.

Blue Cross of Idaho on Feb. 13 filed five health insurance plans in the state that do not comply with the ACA, in response to a Jan. 24 bulletin issued by the Idaho Department of Insurance stating that it would begin allowing insurers in the state to sell “state-based” plans that will not be required to meet the requirements of the ACA. CMS sent Idaho a letter on March 8 stating that the state “would be failing to substantially enforce the provisions” of the ACA by implementing such plans.

Registration Open for Life and Health Qualifications Seminar

Registration opened last month for the Academy’s highly regarded Life and Health Qualifications Seminar, to be held Nov. 4–8 in Arlington, Va. This annual seminar provides attendees with the opportunity to dive deeply into life and health issues and to engage with other actuaries on these topics. Attendees also have the chance to hear directly from instructors who are recognized experts on topics such as health insurance valuation; premium, loss, expense, and contingency reserves; risk-based capital; and professionalism. Attendees will be equipped with the knowledge needed to gain necessary qualifications to issue actuarial opinions for either the NAIC Life and A&H Annual Statement or the NAIC Health Annual Statement. Register today to secure your spot and to save $200 with our early registration rate. Seating is limited to the first 100 registrants.

In the News

• In a subscriber-only Bloomberg BNA article, Senior Health Fellow Cori Uccello discussed a provision in President Trump’s proposed budget to fund Affordable Care Act cost-sharing reductions. In a separate Bloomberg BNA article, Uccello discussed short-term health plans and how they could contribute to a deterioration of the ACA’s individual market and lead to higher premiums.

• Inside Health Policy, Life & Health Advisor, and the Lund Report cited the Prescription Drug Work Group’s issue brief highlighting prescription drug issues present in the U.S. health care system.

• Several media outlets—including the New York Times, Global Financial Market Review, Axios, Health Affairs Blog (which also ran a separate story), the Washington Examiner, WRAL.com (N.C.) and Daily Kos—cited the HPC’s comment letter to the Idaho Department of Insurance on allowing health insurers to offer state-based plans in Idaho that are not compliant with the ACA. A HealthPayer Intelligence story on the decision cited an Academy public statement addressing AHP risks just ahead of January’s State of the Union speech.

• Yahoo News, Yahoo Finance, The Mighty, and Health Affairs Blog articles on newly proposed regulations for short-term limited-duration insurance cited the HPC’s Nov. 7 letter to the secretaries of HHS and the U.S. Labor and Treasury departments.

• A FactCheck.org story cited the HPC’s policy paper on risk pooling and how risk pooling works in the individual health insurance market. The story was reprinted by media outlets including NBC Washington, NBC New York, NBC Los Angeles, NBC Philadelphia, NBC Miami, and New England Cable News. An opinion piece in Managed Healthcare Executive also cited the HPC’s policy paper.

• A CT Mirror story cited the Individual and Small Group Markets Committee’s Feb. 9 comment letter to DOL regarding how to model the impact of AHPs.

• A Healthcare Dive brief cited the Individual and Small Group Markets Committee’s February 2017 issue brief on AHPs.