VOL 14 | NO 2
Date:04/01/2023
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.
Academy Offers Actuarial Perspective on Medicare Trustees Report
Following the release of the 2023 Medicare Trustees Report in late March, the Academy released several publications offering analysis of the annual report.
An Academy alert on both the Medicare and the Social Security trustees’ reports relayed that the Medicare Hospital Insurance (HI) trust fund (Medicare Part A) is projected to have sufficient funds to cover its obligations until 2031, three years later than last year’s report, with dedicated revenues covering 89% of HI costs at that time. Supplementary Medical Insurance (SMI) trust fund expenditures for Medicare Part B as a share of gross domestic product are expected to be lower than previously estimated in part due to lower projected spending.
Issue Brief Key Points
The Health Practice Council (HPC) released an issue brief, Medicare’s Financial Condition: Beyond Actuarial Balance, focusing on the near- and long-term financing challenges facing the program and offering an actuarial perspective on the annual trustees report.
It notes that Medicare continues to face serious financing challenges:
- HI trust fund income is not adequate to fund HI benefits; increases in costs to the SMI trust fund increase pressure on both beneficiary household budgets and the federal budget; and increases in total Medicare spending threaten the program’s sustainability.
- Changes are needed to improve Medicare’s near- and long-term solvency and sustainability.
- Delaying corrective measures would increase the burden that might be imposed on beneficiaries and taxpayers. Any changes aiming to improve Medicare’s financial condition should be considered in light of how they would impact the program’s ability to meet the health care needs of beneficiaries.
- The COVID-19 pandemic continues to affect the trust fund projections and increases the uncertainty surrounding estimates.
Essential Elements Paper
The Academy also published an Essential Elements paper, “Medicare’s Long-Term Sustainability Challenge,” which lays out financial basics including where the program’s funding comes from, where it’s spent, and future shortfalls as projected in recent years’ trustees reports. The Essential Elements series is designed to provide a quick and easy-to-understand overview of actuarial analyses of public policy issues for general audiences.
Webinar Examines Program Details
Spitalnic presents during the webinar
The Academy hosted a May 16 webinar, “Medicare’s Financing Challenges and Options to Address Them,” in which presenters discussed the latest trustees report’s findings.
In the keynote presentation, Paul Spitalnic, chief actuary in the Centers for Medicare & Medicaid Services’ (CMS) Office of the Actuary, covered the trustees report’s key takeaways and went into detail on some of the report’s modeling changes. In particular, he discussed what Medicare spending will look like moving out the COVID-19 pandemic.
Next, panelists discussed options for addressing Medicare program’s short- and long-term financing challenges. Presenters were Bowen Garrett, senior health fellow with the Urban Institute; James Mathews, executive director, Medicare Payment Advisory Commission (MedPAC); and Marilyn Serafini, executive director of the Bipartisan Policy Center’s Health Program. They discussed options for addressing Medicare program’s short- and long-term financing challenges. Academy Senior Health Fellow Cori Uccello moderated.
Panelists agreed that policymakers should act sooner rather than later to address Medicare’s financing challenges, as waiting will only increase the costs. For a complete summary of the webinar, click here.
Projected Medicare Spending
By the Numbers: Medicare Funding
HPC Holds ‘Hill Visits’ on Key Health Issues
HPC volunteers at the CapitolHealth Practice Council (HPC) volunteers and Academy staff held their annual Hill visits with lawmakers, regulators, and policymakers on Capitol Hill and at federal agencies in the nation’s capital in April. Through these meetings—as well as others held throughout the year—public stakeholders gain a greater understanding of the role of the Academy, the importance of the U.S. actuarial profession, and the unique actuarial perspective on many public policy issues.
As the public policy voice for the U.S. actuarial profession, the Academy undertakes “Hill visits” each spring with federal lawmakers and policymakers to develop relationships with and serve as a resource for public stakeholders.
HPC and Academy representatives met with officials from the Department of the Treasury; the Congressional Budget Office; CMS’ Center for Consumer Information and Insurance Oversight (CCIIO); and staff of the Senate Finance Committee; the Committee on Health, Education, Labor and Pensions (HELP); the Special Committee on Aging; the House Committee on Education and the Workforce; and with staff from both Speaker of the House Kevin McCarthy and House Minority Leader Hakeem Jeffries.
“The HPC was grateful to be able to meet with so many federal agencies and congressional offices, and to talk about the important health issues the Academy has been working on,” said Barb Klever, Academy vice president, health. “We hope to be able to follow up on these discussions, including at the Academy’s annual meeting this fall, where we invite CCIIO representatives to offer updates on key health issues.”
Colleen O’Malley Driscoll, Council on Professionalism and Education liaison to the HPC, added, “The Academy’s Hill visits brought to life the mission of the Academy—objective, independent, and effective. Congressional staff clearly valued the actuarial perspective we shared during the meetings, asking many questions on health equity and health care policy.”
HPC volunteers also met with officials from the White House, the Government Accountability Office, and the DOL’s Employee Benefits Security Administration. They discussed Medicare and Medicaid; health insurance coverage; health equity; prescription drug costs; pharmacy benefit managers; the unwinding of the COVID-19 public health emergency; and public health and health care workforce issues, including at long-term care facilities.
They also met with the House Budget Committee, the Congressional Research Service (CRS), the Medicare Payment Advisory Commission (MedPAC), the Medicaid and CHIP Payment and Access Commission (MACPAC), and House Ways and Means Committee’s health subcommittee staff. To learn more and get involved in public policy initiatives, visit the Academy website.
Webinars Look at NBPP Rule, Medicaid Funding
Academy health webinars looked at the recently released 2024 Notice of Benefit and Payment Parameter (NBPP) final rule, and Medicaid in the context of the public health emergency.
- Subject matter experts from CCIIO joined Academy Senior Health Fellow Cori Uccello, who moderated the May 17 webinar, “2024 Final Rules for Exchanges.” They examined the NBPP final rule and the 2024 final actuarial value calculator, released recently by CMS. Together these finalize standards for issuers and marketplaces and cover various aspects of health insurance in the individual and small group health insurance markets. Slides and an on-demand recording are available free as a member benefit.
- HPC Medicaid Committee leadership—including Chairperson and Academy Board member Julia Lerche, who moderated—joined with outside experts for the March 14 webinar, “The Great Unwinding: What’s Next for the Medicaid Population?” which examined the future of Medicaid as states plan to reinitiate Medicaid redeterminations for the first time since the start of the COVID-19 public health emergency (which ended on May 11). Slides and an on-demand recording are available as a member benefit for logged-in Academy members, as is a detailed recap.
The Group Life Waiver Valuation Table Work Group is joining the Society of Actuaries Research Institute (SOARI) on an SOA-hosted webinar June 9 to discuss tables and changes to Actuarial Guideline LXIV (AG 44) that were submitted to the NAIC last year and adopted at the NAIC Fall National Meeting in December. The work group and SOARI are working on an updated report, and presenters will discuss changes in group life waiver of premium claim recovery and mortality experience since the 2005 table was released, development of the 2023 table, and the new statutory valuation standard approved by the NAIC. Register here.
Academy Presents on Health Issues at NAIC Spring National Meeting
HPC volunteers presented at the NAIC’s Spring National Meeting in Louisville, Ky., in mid-March. Academy Health Vice President Barb Klever provided an update on HPC activities to NAIC’s Health Actuarial (B) Task Force (HATF).
Priorities for this year include health equity, COVID-19 and other public health challenges, insurance coverage and benefit design, health care costs and quality, Medicare sustainability, long-term services and supports, financial reporting and solvency, and professionalism.
Professionalism presentations included virtual updates to HATF by representatives of the ASB and the Actuarial Board for Counseling and Discipline (ABCD). Academy Past President and ABCD member Shawna Ackerman focused on the ABCD 2022 Annual Report. ASB Chairperson Rob Damler focused on Actuarial Standard of Practice (ASOP) Nos. 12 and 41, and offered information on life- and health-specific ASOP Nos. 10, 28, and 57.
Health Equity Committee Seeks Volunteers
JamesThe Health Equity Committee, led by Chairperson and Academy Board member Annette James, has an ambitious agenda and needs health actuaries interested in contributing to its efforts.
Prospective volunteers don’t necessarily need experience in health equity issues; rather, the committee is looking for those with experience in one of its areas of focus—health insurance benefit design, health plan pricing, provider contracting and network development, or population health management. It is also interested in people with expertise in data and algorithms.
Behavioral Health Task Force—The HPC is also looking for volunteers for a new task force or work group on behavioral health issues. Those interested in volunteering for either may contact Senior Health Policy Analyst Matthew Williams at williams@actuary.org.
DEI Committee Continues to Develop and Share Resources
Read more about the Academy’s Diversity, Equity & Inclusion initiatives on the Academy’s DEI webpage, which highlights work done by Academy committees and task forces tasked with working specifically on DEI-related issues, as well as work done more generally on these topics by the newly formed Board DEI Committee in support of the focus on reinforcing the importance of DEI in all the Academy’s work.
Academy Participates in Senate Health Roundtable
Senior Health Fellow Cori Uccello participated in a March 28 informal roundtable discussion with the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP).
The roundtable focused on complementary medicine—chiropractors, massage therapists, acupuncturists, and other forms of integrative medicine—and its costs and benefits, and whether and how such services are covered by health insurance. The roundtable was part of a series the HELP Committee is holding on various issues under its jurisdiction.
ASB Approves Health-Related ASOPs
The Actuarial Standards Board undertook recent actions regarding health-related actuarial standards of practice (ASOPs).
- The ASB adopted a revision of ASOP No. 10, now titled U.S. GAAP for Long-Duration Life, Annuity, and Health Products.
- The ASB adopted new ASOP No. 57, Statements of Actuarial Opinion Not Based on an Asset Adequacy Analysis for Life Insurance, Annuity, or Health Insurance Reserves and Related Actuarial Items. A conversion of Actuarial Compliance Guideline (ACG) No. 4, Statutory Statements of Opinion Not Including an Asset Adequacy Analysis by Appointed Actuaries for Life or Health Insurers, it applies to actuaries when performing actuarial services with respect to providing a statement of actuarial opinion for life insurance, annuity, or health insurance reserves and related actuarial items within the scope of the Statement of Actuarial Opinion, NAIC Life and Accident & Health/Fraternal Annual Statement (Blue Book), when the statement is prepared to comply with applicable law and is not based on an asset adequacy analysis because of an exemption.
Nominations Open for ASB Health Member—The Academy is accepting names for members interested in potentially serving as an Actuarial Standards Board (ASB) member—there will be a need to fill one position with a volunteer from the health practice area with service beginning Jan. 1, 2024. Submissions are also due by May 31. Email professionalism@actuary.org.
- The Active Benefits Committee released an issue brief focusing on the role of actuaries in employee benefits for health policy development.
- The Health Solvency Committee sent a comment letter responding to a request from NAIC’s Health Risk-Based Capital (E) Working Group to provide additional investment return scenarios within the subcommittee’s summary of the Investment Income Adjusted Health H2 Experience Fluctuation Risk Factors.
- The Financial Reporting and Solvency Committee sent a comment letter to NAIC’s Long-Term Care Actuarial (B) Working Group inquiring whether the working group might issue an accounting interpretation for the interaction between Actuarial Guideline LI (AG 51) and Appendix A-010.
- The Long-Term Care (LTC) Reform Subcommittee sent a comment letter to NAIC’s Long Term Care Actuarial (B) Working Group that cited the Academy’s 2018 issue brief, Long-Term Care Insurance: Considerations for Treatment of Past Losses in Rate Increase Requests.
Early Registration Rates Available for LHQ Seminar
Register now to receive the best rates to attend the 2023 Life and Health Qualifications Seminar. This annual seminar is the best way to get basic education or relevant continuing education (CE) credit necessary to qualify to issue actuarial opinions for either the NAIC Life and Accident & Health (A&H) Annual Statement or the NAIC Health Annual Statement. The seminar will be held Nov. 6-9 just outside Washington, D.C. Early registration will end on July 31—register today to lock in your spot.
Save the Date for 2023 Academy Annual Meeting
Mark your calendar for Academy’s Envision Tomorrow: 2023 Annual Meeting. This year’s event will be held Nov. 13–14 at the Omni Shoreham Hotel in Washington, D.C. Registration will open this month.
Visit the Academy’s Booth
At SOA’s Health Meeting
Planning to attend the Society of Actuaries Health Meeting in Seattle in late June? Stop by the Academy’s booth to learn more about the latest health-practice activities and how to get more involved with the Academy.
Legislative/Regulatory Activity
Federal
CMS announced May 2 it was extending the date for resumption of in-person services for the Medicare Diabetes Prevention Program beyond the end of the COVID-19 public health emergency, which expired May 11. Suppliers will now have through the end of 2023 to offer such services.
President Biden issued an executive order (EO) on April 18 aimed at boosting long-term care, which has seen its costs soar by some 40% in the past decade. The EO directs the Department of Health and Human Services to consider issuing several regulations and guidance documents to improve the quality of home care jobs. More about the EO is available here.
CMS unveiled new provisions on April 17 addressing health care accessibility and the process of selecting a health plan for millions of Americans next year. It also rolled out its final 2024 Actuarial Value (AV) Calculator Methodology. The 2024 Notice of Benefit and Payment Parameters (NBPP) final rule sets standards for issuers and marketplaces, and addresses issues such as strengthening network adequacy standards.
A bipartisan and bicameral collection of lawmakers introduced legislation geared toward limiting pricing practices by pharmacy benefit managers (PBMs) that charge Medicaid more than they pay pharmacies for a particular drug. The House version is sponsored by Reps. Buddy Carter (R-Ga.) and Vincente Gonzalez (D-Texas). The Senate bill is sponsored by Sens. Peter Welch (D-Vt.) and Roger Marshall (R-Kan.).
State
Washington Gov. Jay Inslee signed HB 1155 into law on April 27, which creates safeguards for consumer health data collected by companies from telehealth platforms to period-tracking apps, as well as location records that could reveal visits to abortion clinics and other health-care facilities. The measure is seen as a first-of-its-kind measure nationally, which gives consumers privacy rights over personal health data that companies collect about them.
Colorado Gov. Jared Polis on April 20 signed SB 23-222 into law, dropping the requirement that Medicaid recipients in the state pay a co-pay for pharmacy and outpatient services. The change is projected to cost the state $7.34 million in the next fiscal year, $5.5 million of which will be covered by federal funds.
Arkansas Gov. Sarah Huckabee Sanders signed HB 1667 on April 13, a law meant to increase transparency, access, and sustainability of home- and community-based services for state Medicaid beneficiaries who qualify for the state’s Living Choices waiver based on annual assisted living costs.
Maryland Gov. Wes Moore signed legislation into law on April 11 reestablishing the authority of the state’s Prescription Drug Affordability Board, under certain circumstances, to set upper payments limits for prescription drug products that are purchased or paid for by or through some state or local government entities, plans, or programs.
New Mexico Gov. Michelle Lujan Grisham on April 4 signed SB 273, a bill that bars insurance products sold in that state from applying more coverage restrictions on mental health and substance use disorders than are applied to general health services. Insurers may not discriminate against patients regarding mental health and substance use disorder treatment based on a patient’s disability, that a court has ordered treatment, or other diagnoses along with the mental health or substance use disorder.
North Carolina Gov. Roy Cooper signed legislation into law March 27 expanding the availability of Medicaid in the state. The measure is expected to provide health coverage to more than 600,000 people and bring in billions of federal dollars to help pay for the coverage. North Carolina is the 40th state to expand Medicaid. Read the Academy alert.
Virginia Gov. Glenn Youngkin signed HB 1375 / SB 1011 into law on March 27, companion bills that bar health insurance providers from charging tobacco users more for using such products. The provisions of the bill apply to health benefit plans providing individual or small group health insurance coverage beginning Jan. 1, 2024.
Youngkin also signed HB 1602 / SB 1418, which states that health care providers aren’t required to maintain a physical presence in Virginia to maintain eligibility as a Medicaid provider. Additionally, it establishes that telemedicine services provider groups with health care providers duly licensed by the state are not required to maintain an in-state service address to maintain eligibility as a Medicaid vendor or Medicaid provider group.
Wyoming Gov. Mark Gordon signed SF 151 into law on March 17, which prohibits PBMs from retroactively denying or reducing reimbursement for a covered pharmacy service or claim. The law also requires PBMs to provide reliable contact information to pharmacies to discuss appeals and authorizes network pharmacies to file appeals in electronic batch formats.
Iowa Gov. Kim Reynolds signed HF 161 into law in February, which caps noneconomic damages in lawsuits against health care providers that result in the loss or impairment of a bodily function, disfigurement, or death, at $1 million for clinics and individual doctors, and $2 million for hospitals. Noneconomic damages are awarded to compensate for subjective harm caused by an incident, such as pain and suffering.
Academy Senior Health Fellow Cori Uccello was quoted in a CNN story about the Medicare Trustees Report on the day it was released, noting it’s not “a time to become complacent” about addressing the program’s financial challenges.
The American Journal of Managed Care published an extensive report on Academy Health Equity Committee Chairperson Annette James’ presentation in a March 8 health equity summit sponsored by the University of Michigan’s V-Bid Center.
A subscriber-only Health Plan Weekly story on Medicaid redeterminations covered the Academy’s March 14 webinar, “The Great Unwinding: What’s Next for the Medicaid Population?”
A Government Technology story on the AI aspects of Colorado’s insurance anti-discrimination law cited the Academy’s comment letter on the Colorado Division of Insurance’s recent exposure of a draft regulation.
Think Advisor published a story on effects of COVID-19 mortality on Medicare, based on comments in the Academy’s May 16 webinar on the Medicare Trustees Report.
Nominate Academy Members for Annual Awards
Nominations are open for the Academy’s annual service and Rising Actuary awards. Nominate Academy members by June 15 for the following awards, which will be presented at the Academy’s Annual Meeting in November:
- Jarvis Farley Service Award, a lifetime achievement award presented to an actuary whose volunteer efforts on behalf of the Academy have made significant contributions to the advancement of the profession through a lifetime of service.
- Robert J. Myers Public Service Award, which honors an actuary who has made an exceptional contribution to the common good, specifically through a single noteworthy public service achievement or a career devoted to public service.
- Outstanding Volunteerism Awards (OVAs), which honor Academy volunteers who have made a noteworthy contribution during this past year.
- Rising Actuary Awards, which recognize younger leaders who are on the way up in the profession.
Learn more and submit your nomination at actuary.org/awards.