Academy Activities

The Academy’s Exchanges Work Group on Oct. 6 submitted comments to the Centers for Medicare & Medicaid Services (CMS) in response to proposed regulations establishing health insurance exchanges and qualified health plans under the Affordable Care Act (ACA).

The Academy’s Medicare Supplement Work Group on Oct. 4 submitted comments to the National Association of Insurance Commissioners (NAIC) Medigap PPACA Subgroup on its discussion paper, Medicare Supplement Insurance First Dollar Coverage and Cost-Shares.

The proposed regulations that would implement the three risk-sharing mechanisms in the ACA—risk adjustment, reinsurance, and risk corridors—were addressed by the Academy’s Risk-Sharing Work Group in a comprehensive comment letter submitted to the CMS on Oct. 28.

Legislative and Regulatory Updates

The Department of Health and Human Services (HHS) issued a final rule relating to accountable care organizations (ACOs) and the implementation of the Medicare Shared Savings Program. The final rule allows suppliers and providers of services to continue to receive traditional Medicare fee-for-service (FFS) payments and be eligible for additional payments if they meet specified quality and savings requirements. The final rule differs from the proposed rule in several respects:

• ACOs can choose to maintain a one-sided risk model for the full three-year period instead of having to switch to a two-sided model after two years;

• ACOs opting for the one-sided model will share in savings above a specified threshold from the first dollar instead of just sharing savings above a 2 percent threshold;

• The CMS will not require the proposed 25 percent withholding of shared savings for a specified period of time;

• Only 33, instead of 65, quality measures will have to be reported; and

• ACOs will be given advance notice of the patients for which they will be accountable.

The Obama administration has officially tabled the Community Living Assistance Services and Supports (CLASS) Act. The voluntary long-term care insurance program enacted as part of the ACA could not be guaranteed to be financially viable, Health and Human Services Secretary Kathleen Sebelius wrote in an Oct. 14 letter to House Speaker John Boehner. Concerns regarding the viability of the program have been circulating since its inception as a part of health care reform. Many of these issues were raised by a joint work group of the Academy’s Federal Long-Term Care Task Force and the Society of Actuaries’ (SOA) Long-Term Care Insurance Section Council in a July 2009 letter to the Senate Committee on Health, Education, Labor, and Pensions. The CLASS Act was originally envisioned by the late Sen. Ted Kennedy (D-Mass.) as a way to provide long-term care insurance on a voluntary basis. The program was to be funded entirely through insurance premiums and would have received no taxpayer subsidies. The HHS has released a report that contains an actuarial, marketing, and legal analysis of the CLASS program and a detailed explanation of why it was abandoned.

The Institute of Medicine (IOM) has released a consensus report that addresses the essential health benefits (EHB) to be offered through the health insurance exchanges under the ACA. The IOM report proposes a set of criteria and methods that should be used in deciding the benefits that are most important for coverage, but does not contain any specific recommendations for the benefits that should be included. The IMO’s list of criteria includes:

• Maximizing the number of insured persons;

• Providing protection for populations considered particularly vulnerable;

• Encouraging better care practices;

• Focusing on high-value services and reducing low-value services; and

• Protecting against financial risks due to catastrophic events and illnesses.

In The News/Media Activities

Academy Senior Health Fellow Cori Uccello was a panelist during an Oct. 17 briefing on actuarial value under the Affordable Care Act hosted by the Consumers Union at the Kaiser Family Foundation. Uccello’s presentation, which explored potential approaches to calculating actuarial value, was included in the Bureau of National Affairs Oct. 18 coverage on the event. “Actuarial value is not an end-all, be-all measure for consumers to use when they are trying to make their health insurance purchase decisions,” Uccello said. “Because actuarial values are done on an average basis for a given population, different plans are going to be more or less valuable to any particular individual, even among plans in the same benefit tier.”

The Academy’s 2009 letter to Congress that included an actuarial analysis of the CLASS Act conducted by a joint Academy/Society of Actuaries work group was cited by an on-air contributor during an Oct. 17 panel discussion on FOX News Channel’s “Special Report with Bret Baier.” The discussion came after Department of Health and Human Services Secretary Kathleen Sebelius announced that she could “not see a viable path forward for CLASS implementation at this time.” The letter and analysis also were cited during a joint hearing of the U.S. House Energy and Commerce Subcommittee on Health and the Subcommittee on Oversight and Investigations by Rep. Joe Pitts (R-Pa.), chairman of the Subcommittee on Health, Rep. Charles Boustany (R-La.), and Rep. Phil Gingrey (R-Ga.). The Oct. 26 hearing was broadcast on C-SPAN.

After Secretary Sebelius’ announcement, the Academy released a statement that included a comment from Steve Schoonveld, the co-chairperson of the joint Academy and SOA CLASS Act Task Force, that was quoted extensively in trade media reports, including National Underwriter Life & Health on Oct. 18 and California Broker and Wolters Kluwer’s “Health Reform Talk” blog on Oct. 19. Schoonveld also was quoted earlier in the month in a Kaiser Health News FAQ on the CLASS Act. Schoonveld explained the actuaries’ concerns with the program’s design and provided a list of recommendations to improve the program in the Oct. 5 feature.

News links are to external websites. The Academy is not responsible for the content of these websites.

Upcoming Health Care Reform Events

AHIP’s Exchange Conference

Conference: Nov. 16–17, Chicago (fee charged)

Sponsor: America’s Health Insurance Plans (AHIP)

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