HealthCheck, Summer 2024

Summer 2024
VOL 15 | NO 2

A Deep-Dive Into the 2024 Medicare Trustees Report

SkoogThe annual Medicare Trustees Report released this spring showed the projected long-range financial condition of the Medicare’s hospital insurance (HI) trust fund improved since last year due to several factors, including a policy change correcting the way medical education expenses are accounted for in Medicare Advantage rates starting in 2024; higher payroll tax income resulting from stronger-than-expected economic growth; and lower-than-projected 2023 program expenditures.

HealthCheck did a Q&A with Medicare Committee Vice Chairperson Derek Skoog, who offered additional insight on some of the key points covered in the report and the issue brief.

Every year the Medicare Committee puts out an issue brief summarizing the findings of the Trustees Report. What are the big takeaways this year?

The takeaways have been very consistent over the last several years. HI trust fund expenses are projected to exceed revenues; increases in costs to the Supplementary Medical Insurance (SMI) Trust Fund will put increasing pressure on both beneficiary household budgets and the federal budget; and increases in total Medicare spending threaten the program’s overall sustainability.

The issue brief notes concerns with the HI trust fund, but didn’t this year’s report project a five-year delay in the HI trust fund depletion date compared to last year’s report—and is that good news?

The depletion date is now projected to be 2036, compared to 2031 in last year’s report. Nevertheless, HI expenditures are projected to exceed HI revenues in 2030 and beyond. So even with the improvement, HI revenues are inadequate to cover promised benefits. The delay in trust-fund depletion gives policymakers more time to make the difficult decisions on how to address this shortfall—but the sooner they make these decisions, the better. Also, there tends to be a laser focus on the HI trust fund depletion date, but that’s not the only important metric. Premiums and out-of-pocket spending as a share of beneficiary income, Medicare general revenues as a share of the federal budget, and total Medicare spending as a share of the economy are all important metrics as well. In addition, demographic factors play a role, with the number of workers to beneficiaries declining over time. Each point to increasing challenges to Medicare’s sustainability.

The trust fund focuses on the financial aspects of the program. What else should we be thinking about when thinking about Medicare sustainability?

We also need to assess whether the program is meeting beneficiary needs going forward. Aside from the addition of the prescription drug program in 2006, Medicare’s fee-for-service benefit package has remained mostly unchanged. Some services are not covered, and beneficiary out-of-pocket costs are not capped. Other questions to examine are whether the care received by beneficiaries is high-quality and whether they have problems accessing providers or services.

Are there any other activities the committee is undertaking regarding the Trustees Report?

We are currently working on a graphical summary of the Trustees Report, to make it more reader-friendly. In addition, the committee will be looking into the various policy options that have been put forward to address the financial sustainability challenges that are highlighted in the report.

What’s next on the committee’s agenda?

The Medicare Committee will be working on a few Health Practice Council cross-committee issues, such as the intersection between Medicare and behavioral health, climate change, and health equity. At Envision Tomorrow, the Academy’s annual meeting in October, we will have a breakout session on the integration of care for dual-eligible beneficiaries across the Medicare and Medicaid programs.

Read more— An Academy alert outlined the report (along with the Social Security Trustees Report), the Medicare Committee followed with an issue brief going into more detail, and the Academy held a May 23 webinar that featured Centers for Medicare & Medicaid Services (CMS) Chief Actuary Paul Spitalnic. The Actuarially Sound blog also covered the release of both reports.

Annette James Nominated to Be Next Health VP

JamesAcademy Board member Annette James was nominated to be health vice president, succeeding Barb Klever. James, a member-selected director for the past three years, is co-chairperson of the Health Equity Committee, chairperson of the Actuarial Standards Board’s Health Committee, and was chairperson of the Academy’s DEI Committee.

“It’s an honor to be nominated as health vice president,” James said. “I’m proud of the work the Academy, the Board, and the numerous volunteer committees do on behalf of the profession on public policy and professionalism issues. Barb Klever did a great job as health vice president, and I look forward to leading the Health Practice Council as we continue to provide our insight regarding the opportunities—and challenges—of achieving access to affordable health care and improved health outcomes for all Americans.”

Election Clearinghouse Offers Insight on Health, Public Policy Issues

As the presidential election looms closer, the Academy launched an Election 2024: Issues Clearinghouse earlier this year. Highlighting the Academy’s public policy work, it focuses on six key mega-issues, including health care. The Actuarially Sound blog also is a vehicle to share the actuarial profession’s independent and informed insights, with a specific focus on those issues that will likely influence what our elected officials consider in the next four years.

Actuary Voices Spotlights Key Issues

In a special edition of Actuary Voices, Senior Director of Public Policy Geralyn Trujillo discusses the Clearinghouse and the Academy’s objective and nonpartisan resources being offered this presidential election year, in a conversation with Senior Policy Analyst Ted Gotsch. Subscribe to Actuary Voices wherever you get your favorite podcasts.

Academy ‘Hill Visits’ Offer Perspective on Key Issues

Staff and health volunteers including VP Barb Klever (center) at the Treasury Department

Academy volunteers, fellows, and staff from the Health, Casualty, and Risk Management & Financial Reporting Practice Councils visited federal lawmakers, regulators, and policymakers on Capitol Hill in April for their annual “Hill visits.” Key public policy issues were discussed in the 30-plus meetings and relevant Academy resources on topics including Medicare, Medicaid, and health insurance markets were shared with key staffers.

Hill visits present an opportunity for the Academy to offer its nonpartisan and objective perspective on key issues with elected officials and staff—particularly valuable during a presidential election year.

In the health area, along with Medicaid, health equity and insurance coverage, as well as benefit design were of particular legislative and regulatory interest.

“We were glad to have an opportunity to meet with key federal health policy staff, reinforce the value of actuarial perspectives, and discuss high-level issues related to health insurance, health equity, Medicare, and Medicaid that affect all Americans,” said Academy Health Vice President Barb Klever.

“Holding Hill visits and bringing the actuarial profession in front of a variety of people—some of whom have never interacted with actuaries before—creates avenues for communication and gives us the opportunity to inform public discourse,” added Jason Karcher, chairperson of the Individual and Small Group Markets Committee.

Academy Board member and Health Equity Committee Co-Chairperson Annette James said the in-person meetings were a positive experience for volunteers. “I could not have anticipated how impactful being in-person would have been,” James said. “To actually talk to people and see the interaction between people, it really is a very different experience and something that can’t be replicated on Zoom.”

Academy Presents at SOA Health Meeting

Academy staff and volunteers attended and presented at the Society of Actuaries’ (SOA) Health Meeting in late June in Baltimore. Presentations included “Financial Inequities Caused by Climate-Related Disasters,” with Academy President Lisa Slotznick and Charles Merz; “Improving Data Analysis Using a Health Equity Lens,” with Board member Julia Lerche and Health Equity Committee Co-chairperson Rebecca Sheppard; and “Speak Up! Sticking to Ethics in High-Stakes Environments,” with Slotznick, President-Elect Darrell Knapp, and former ASB Chairperson Rob Damler.

HPC to Present at NAIC Summer Meeting in August

The Health Practice Council (HPC) will present an update on its activity to NAIC’s Health Actuarial (B) Task Force (HATF) as part of the NAIC Summer National Meeting, set for Chicago in August. Priorities discussed will include health equity and behavioral health, and heightened awareness in this election year around the financial sustainability of the commercial and government markets—especially in Medicaid and Medicare Advantage. There is also interest in a conversation around health premium cost drivers, as regulators look ahead to 2025 rate filings.

The HPC is also presenting verbally to HATF in July on the H2-Underwriting Review Project and looks forward to continuing discussions with HATF and regulators on long-term care issues. They will also discuss our ongoing work with the Health Risk-Based Capital (E) Working Group on the H3-Health Care Receivables Project.

NAIC Meeting Recaps—Catch up on past NAIC meetings by watching the Academy’s recap of the Spring Assembly in Phoenix, and look for a recap of the Summer Meeting in late August.

Actuary Voices Features Rebecca Sheppard

A recent Actuary Voices features a conversation with Rebecca “Becky” Sheppard, co-chairperson of the Health Equity Committee. Sheppard, a presenter at the Academy’s Health Equity Symposium last November, discussed her journey to become an actuary and her interest in health equity issues that led her to the committee, and spoke warmly about her experiences as an Academy volunteer. Subscribe to Actuary Voices wherever you get your favorite podcasts.

Webinars Examine Premium Drivers, NBPP, Medicaid

Three recent Academy webinars looked at key health issues.

2025 Premium Drivers—Members of the Individual and Small Group Markets Committee presented in the July 18 webinar, Drivers of 2025 Health Insurance Premium Changes. Chairperson Jason Karcher moderated a discussion, in which presenters explored factors including the resumption of Medicaid eligibility; the shift of small groups from fully insured plans to other funding arrangements; and inflation. Slides and audio are available as a member benefit.
NBPP Rule—A June 5 webinar examined the 2025 Notice of Benefit and Payment Parameters (NBPP) rule, released by the Centers for Medicare & Medicaid Services (CMS). Rogelyn McLean, senior adviser in CMS’ Center for Consumer Information and Insurance Oversight (CCIIO), led a group of CCIIO presenters. Slides and audio are available free.
Medicaid—Continuous Medicaid Unwinding: What’s Next for the Health Care Markets in 2024? featured a discussion on health insurance markets a year after the expiration of the COVID-19 public health emergency, the unwinding of continuous coverage requirements, and the projected effects on health coverage for the Medicaid population. Slides and a recording are available as a complimentary member benefit.

Health News in Brief

Senior Health Policy Analyst Matthew Williams represented the Academy at the April 2024 Insurance Public Policy Summit in Washington, D.C., interacting with key external stakeholders from the NAIC and other organizations.
The HPC submitted comments to the Actuarial Standards Board on the proposed revision of ASOP No. 12, Risk Classification (for All Practice Areas).
Board member Annette James provided an actuarial perspective on equity considerations in employer-based insurance as a panelist in a session at May’s ISPOR 2024 conference in Atlanta.

Highlights From HealthCheck

Prefer to watch your news? Check out this “Highlights From HealthCheck” video for a quick recap of what you need to know.

Early Discounts Available
for Envision Tomorrow

Health Breakout Sessions Outlined

Register early and get a discount to Envision Tomorrow, the Academy’s annual meeting to be held at the Grand Hyatt Washington in the nation’s capital on Oct. 15 and 16.

The meeting’s theme is “Exploring a World of Risk,” and former NATO Supreme Allied Commander Gen. Wesley Clark will give the opening keynote address on leadership, global risks, and the U.S. political landscape. Financial and insurance inclusion researcher Leroy Nunery II will lead a discussion on “Growing Financial Inclusion.”

Health Breakout Sessions—Health breakout sessions will include the integration of care for dual-eligible beneficiaries across the Medicare and Medicaid programs; “Broadening the Focus: Incorporating Indirect Costs/Savings and Non-Financial Outcomes in Actuarial Analysis,” which will look at behavioral health issues (and will be broadcast as part of Envision Tomorrow’s virtual program); and a panel from the Center for Consumer Information and Insurance Oversight (CCIIO) that will look at Affordable Care Act issues.

Get your early-bird discount—register today.

In the News

An InsuranceNewsNet article spotlights the Academy webinar on the unwinding of pandemic-related Medicaid continuous coverage. InsuranceNewsNet reported on another webinar, Medicare’s Financial Outlook and the Effects of Growing Enrollment in Medicare Advantage.

Health Plan Weekly cited the Academy’s February comment letter to the Department of Labor’s Employee Benefits Security Administration, responding to a proposed rule on the definition of “employer” in association health plans.

A Health Affairs article cited the Academy’s July 2021 issue brief on long-term care financing reform proposals involving public programs.

Legislative/Regulatory Activity

Federal Regulatory

The U.S. Supreme Court issued a unanimous decision on June 13, preserving full access to the widely used abortion pill Mifiprex, and the generic version, mifepristone. The court overturned a federal appellate ruling, barring mail-order prescriptions for mifepristone, the drug now used in more than half of U.S. abortions.

The Department of Health and Human Services (HHS) unveiled a national maternal mental health strategy on May 14, seeking to reduce the effects of untreated mental health and substance use conditions during and after pregnancy. The plan and report to Congress stems from the work of the Task Force on Maternal Mental Health, which was formed after the fiscal 2023 omnibus spending law.

The Centers for Medicare & Medicaid (CMS) issued a final rule in May to improve access to care, quality and health outcomes, and better address health equity issues in the Medicaid program across fee-for-service, managed care delivery systems, and in-home and community-based services programs. These changes are meant to increase transparency and accountability, standardize data and monitoring, and create opportunities for states to promote active beneficiary engagement in their Medicaid programs.

Under a final rule published May 3, Deferred Action for Childhood Arrivals (DACA) recipients will be eligible to enroll in Affordable Care Act (ACA) coverage in November. The final rule permits DACA recipients to apply for coverage through HealthCare.gov and state-based marketplaces. The Biden administration expects 100,000 people will sign up under the new rule.

The Department of Labor rescinded a rule implemented during the Trump administration related to the definition of “employer” in relationship to association health plans (AHPs) on April 29. The previous language allowed small businesses and self-employed individuals to pool together to buy health insurance. AHPs were particularly attractive to these smaller groups, as they are usually less costly because the plans are not required to comply with all of the ACA requirements. Rescinding the language means the definition of “employer” reverts back to an earlier version.

On April 26, HHS restored gender identity and sexual orientation discrimination protections under Section 1557 of the ACA, which had been removed during the Trump administration. Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age, or disability by entities that primarily provide health care and receive federal funding.

President Biden issued a March 18 executive order, calling for an expansion of research into women’s health. This executive order is meant to strengthen research and data standards on women’s health across all relevant research; prioritize investments in women’s health research; galvanize new research on women’s midlife health; and access unmet needs to support women’s health research.

Federal Legislative

The House Energy and Commerce Committee approved seven Medicare- and Medicaid-related bills during a June 12 mark-up session. Included were:

HR 7858, offered by Rep. John James of Michigan, which creates a Medicare code for claims for telemental health services;
HR 5526, introduced by Rep. Diana Harshbarger of Tennessee, which extends a COVID-19 waiver to allow certain Medicare patients to receive medications by mail directly from their physician if they cannot be present in the office;
HR 4758, sponsored by Rep. Lori Trahan of Massachusetts, which streamlines Medicaid enrollment for children who are seeking care from providers across state lines;
HR 8112, introduced by Rep. Anthony D’Esposito of New York, which checks Medicaid databases for outdated providers;
HR 8111, offered by Rep. Mariannette Miller-Meeks of Iowa, which requires states to verify address information from Medicaid recipients;
HR 8089, sponsored by Rep. Mike Garcia of California, which mandates additional provider screenings under Medicaid; and
HR 8084, introduced by Rep. Gus Billirakis of Florida, which requires states to verify that people enrolled in Medicaid are alive.

The Senate Health, Education, Labor and Pensions (HELP) Committee approved six five-year reauthorizations for health programs expiring at the end of the fiscal year in late May. Included are:

S 3679, sponsored by Sen. Tim Kaine of Virginia, reauthorizing grants for programs that promote mental health among the health professional workforce;
S 4351, offered by Sen. Patty Murray of Washington, reauthorizing funding for poison control centers;
S 3765, sponsored by Sen. Bob Casey of Pennsylvania, reauthorizing programs related to emergency medical services for children;
S 3775, sponsored by Sen. Susan Collins of Maine, reauthorizing the BOLD Infrastructure for Alzheimer’s Act, which created a national, uniform public health infrastructure around Alzheimer’s risk reduction, early detection, and diagnosis;
S 4325, also offered by Collins, reauthorizing grants for respite care; and
S 3757, introduced by Sen. Richard Durbin of Illinois, reauthorizing the national congenital heart disease program.

The House Ways and Means Committee voted to advance six bills that address a wide range of pressing health care issues, particularly those facing rural communities:

HR 8261, introduced by Rep. David Schweikert of Arizona, extends pandemic-era Medicare telehealth flexibilities through 2026;
HR 7931, offered by Rep. Carol Miller of West Virginia, permanently expands Medicare emergency ambulance coverage for mountainous communities;
HR 8245, sponsored by Rep. Randy Feenstra of Iowa, establishes grants to help rural hospitals stabilize their finances and remain open;
HR 8244, introduced by Rep. Ron Estes of Kansas, provides more training opportunities for Americans working to become critical nursing aides;
HR 8235, sponsored by Rep. Gregory Murphy of North Carolina, allows more medical students to complete their medical residencies in rural hospitals; and
HR 8246, offered by Rep. Jodey Arrington of Texas, allows rural communities who had their local hospitals close down to convert to the new federal Rural Emergency Hospital designation.

The House passed four health care bills that reauthorize programs related to maternal mortality, pediatric research and cancer, and clarify current laws related to primary care coverage and mental health:

HR 498, sponsored by Rep. Jay Obernolte of California, tightens the cybersecurity of the 988 Suicide and Crisis Lifeline by requiring the lifeline’s network administrator and local call centers to report cybersecurity issues to the Substance Abuse and Mental Health Services Administration;
HR 3838, introduced by Rep. Michael Burgess of Texas, reauthorizes federal support for Maternal Mortality Review Committees through fiscal year 2028;
HR 3391, offered by Rep. Jennifer Wexton of Virginia, reauthorizes the National Institutes of Health’s Pediatric Research Initiative through fiscal year 2028; and
HR 3836, sponsored by Rep. Dan Crenshaw of Texas, clarifies current law to allow state Medicaid programs to offer a payment model that allows beneficiaries to receive primary care services via a regular flat fee.

State Administrative Actions

A federal district judge struck down major aspects of Florida’s ban on gender-affirming care for minors and the state’s restrictions on similar care for adults on June 11, declaring them discriminatory and unconstitutional. The opinion in the case Doe v. Ladapo, issued by Judge Robert Hinkle of the Northern District of Florida, permanently blocks Florida’s adult and minor gender-affirming care restrictions under a 2023 Florida law prohibiting gender-affirming care for anyone under age 18.

A new West Virginia law requiring manufacturers to distribute discounted drugs to an unlimited number of pharmacies under the federal 340(b) Drug Pricing Program is being challenged by the pharmaceutical industry. Novartis Pharmaceuticals Corp. and the Pharmaceutical Research and Manufacturers of America are seeking to block the law, which took effect June 6.

Louisiana Gov. Jeff Landry signed a bill adding mifepristone and misoprostol, the two drugs used in the FDA-approved regimen to induce an abortion, to the list of Schedule IV drugs under Louisiana’s Uniform Controlled Dangerous Substances Law on May 24. It is the first state in the nation to make possessing such pills without a prescription a crime. [Note: The June 13 Supreme Court ruling does not overturn this law.]

On April 29, the U.S. Court of Appeals for the Fourth Circuit ruled that North Carolina and West Virginia health plans’ blanket coverage exclusions for gender-affirming care were unconstitutional. The court determined that a North Carolina state employee health plan violates the 14th Amendment’s equal protection clause by refusing to pay for medically necessary gender-dysphoria treatments. Additionally, it ruled West Virginia’s Medicaid program is unconstitutional to the extent that it pays for some gender-affirming care, but not for surgeries that are typically covered for non-transgender patients. Both decisions upheld lower court rulings.

The Florida Supreme Court ruled on April 1 that the state’s constitution doesn’t protect abortion rights, narrowing the scope of a provision in the Florida Constitution that protects the right to privacy, which was added by voters in 1980 and long interpreted by courts as a safeguard against abortion restrictions. In a separate decision the same day, the high court also ruled that an amendment to enshrine abortion rights in the state’s constitution can go on the November ballot, setting up a vote that could undo the new strict abortion ban in a matter of months.

State Legislation

Colorado Gov. Jared Polis signed SB 24-080 on June 5, which requires health insurance carriers to comply with federal price transparency laws and make an internet-based, self-service tool available. The tool provides real-time responses to questions concerning carrier prices that are based on cost-sharing information. Polis also signed SB 24-110 on June 3, prohibiting the Department of Health Care Policy and Financing from requiring prior authorization for an antipsychotic prescription drug used to treat a mental health condition.

Florida Gov. Ron DeSantis signed HB 241 on April 8, requiring state group health insurance plans to provide coverage and payment for annual skin cancer screenings without imposing any cost-sharing requirement.

Iowa Gov. Kim Reynolds signed HF 2489, mandating insurance coverage for supplemental and diagnostic breast examinations. It also prohibits the coverage from being less favorable than coverage a health carrier offers for screening mammograms.

Kentucky Gov. Andy Beshear signed SB 188, defining terms for pharmacy-related insurance practices and requiring insurers, pharmacy benefit managers, and other pharmacy benefits administrators to establish “reasonably adequate and accessible pharmacy networks.” Beshear signed HB 52 on April 4, requiring coverage for cancer screenings, tests, and procedures by state employee, Medicaid, limited health service benefit plans, and self-insured employer group health plans.

Mississippi Gov. Tate Reeves signed HB 728 on April 12, barring health insurance providers, pharmacy benefit managers, and other third-party payors from engaging in discriminatory actions against entities participating in the federal 340B drug discount program.

Tennessee Gov. Bill Lee signed HB 295 on May 29, requiring a health benefit plan to provide, upon the recommendation of a physician, coverage for the early detection of prostate cancer for men aged 40-to-49 who are at a high risk of developing prostate cancer. Lee signed SB 1919 on May 1, mandating that health insurance policies providing coverage for prescription contraceptives allow for a 12-month refill of contraceptives to be obtained by an insured person.

Virginia Gov. Glenn Youngkin signed two laws: SB 543/HB 601, requiring mental health and substance abuse services rendered at a behavioral health crisis service provider be treated as emergency services by health insurers and covered under their health plans; and HB 123/SB 425, making changes to various requirements governing the processing and payment of claims by health insurers, including what constitutes a “clean claim.”