VOL 14 | NO 3
Date:07/01/2023
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.
Q&A—What’s Driving Premiums for 2024?
BohlAs it does annually, the Academy’s Individual and Small Group Markets Committee in July published an issue brief, Drivers of 2024 Health Insurance Premium Changes, that outlines the factors likely to drive premium changes for the next plan year. Committee members also provided an overview of the new premium drivers during a July 19 webinar. Slides and audio are available as a complimentary member benefit.
HealthCheck spoke with Joyce Bohl, chairperson of the committee, regarding the issue brief—and what may be in store for premiums in 2024.
“Uncertainty” seems to be the watchword for next year. What are some of the unknown factors for 2024?
2024 is unique as there are many factors driving premium changes, adding more uncertainty. These include:
- State Medicaid redeterminations affecting the underlying composition of the individual market risk pool, and, to a lesser extent, the small group market risk pool.
- Uncertainty in health care spending due to increases in negotiated provider payment rates, historically high health care inflation, and shortages and a high demand for medical staff.
- COVID-19: The unknown cost impact of long COVID (incidence rates and unit costs) and the shifting payments from the federal government to carriers for vaccines and testing.
The public health emergency (PHE) for COVID-19 is over, but the pandemic casts a long shadow. Looking specifically at state Medicaid redeterminations, what do you expect to see as regards the composition of the individual risk pool?
According to the Centers for Medicare & Medicaid Services (CMS), 17 million people lose State Children’s Health Insurance Program (SCHIP) / Medicaid coverage annually. However, over 23 million people were added to SCHIP / Medicaid in the three years ending March 2023. In total, state Medicaid agencies must redetermine eligibility for over 93 million SCHIP and Medicaid enrollees. Nearly 9 million Affordable Care Act (ACA) adults added coverage during that time. In states that have not expanded Medicaid, many of these adults may no longer be Medicaid-eligible.
Other factors that drive the termination rates include the state-specific renewal process:
- The timeline that each state has selected for their redetermination process (12 month or longer period),
- The use of databases to update enrollee contact information when the enrollee cannot be located or information verified,
- The need to increase staffing at state agencies to process the unprecedented number of redeterminations.
- Leveraging a formal process for following up with enrollees when additional information is needed.
There are differences of opinion as to whether the 2024 individual risk pool will improve as these enrollees move from Medicaid to the ACA marketplace. It is important to remember that people who are disenrolled from Medicaid may enroll in an individual plan, a group plan, or decline to enroll in any coverage. It is expected that the less healthy people who are disenrolled from Medicaid would enroll in coverage. The question remains as to whether the younger and healthier people who are disenrolled from Medicaid will choose to enroll in an individual or group plan in 2024.
Health care cost trend has recently outpaced even an accelerated rise in inflation. What are pricing actuaries seeing for 2024 premiums as regards medical trend?
A recent study from PwC’s Health Research Institute estimates 7% medical trend for both the individual and the small group markets. The report is based on a survey of actuaries working at U.S. health plans. This is a one percentage point increase from 2023.
Prescription drug trend tends to run several points higher than medical trend, driven by specialty drugs and new gene therapies.
What has been the overall effect of telemedicine on premiums since 2020—and what should actuaries watch for in terms of legislation around this burgeoning area?
The expansion of telemedicine had a very minor impact on premiums. In some cases, the increase in telemedicine utilization was offset by a decrease in in-person office visits. Telemedicine continues to be widely used, well above pre-COVID-19 levels. Actuaries should follow the development of state laws and regulations, along with the extension of current federal regulations which have broadened access to telemedicine and seek to ensure parity between providers, regardless of place of service.
It wouldn’t be 2023 without a question about artificial intelligence—are you seeing an increase in AI or machine learning technologies in your workstreams?
Yes, I have seen a significant increase in the use of these technologies. However, a degree of caution, common sense, and professional judgment should be applied when deciding the level of reliance to be placed on the outputs.
Actuaries are encouraged to consult the Code of Professional Conduct for guidance. Precept 1 addresses the performance of actuarial services with honesty, integrity, competence, skill and care, and Precept 3 states “[a]n Actuary shall ensure that Actuarial Services performed by or under the direction of the Actuary satisfy applicable standards of practice.”
James Spotlights Academy’s Health Equity Work
James (right) on Nevada’s “Face the State”
Viewers of the Reno, Nev.-based public affairs program “Face the State” had a special treat in mid-August, as Health Equity Committee Chairperson Annette James was a featured guest for the program’s long-interview format.
James opened with an explanation of what an actuary is, and then focused on the Academy’s work on health equity issues. She emphasized the need for stakeholders to work together in developing solutions and highlighted the central role of data in addressing equity issues. “You can’t change that which you can’t measure, so having access to good data is really important,” James said.
James also previewed the Health Equity Symposium that the Academy will be hosting this November, noting that Nevada’s congressional delegation among other members of Congress and stakeholders in this important public policy dialogue will be invited.
Watch the interview here and visit the Academy’s website to learn more about its work on health equity.
Academy Presents on Health Equity, CSRs at SOA Meetings
James also presented on “Health Equity: What It Means for Actuaries” at the Society of Actuaries’ (SOA) Health Meeting in Seattle on June 28. James’ presentation offered definitions, dimensions of health disparities, why actuaries care about health equity (along with challenges and opportunities), and gave an overview of the HEC’s work, including the planned Nov. 15 symposium in Washington, D.C.
Separately, Academy Senior Health Fellow Cori Uccello presented on “Considerations for Calculating Cost-Sharing Reduction Load Factors” at SOA’s July 12 virtual health meeting. The presentation covered Affordable Care Act premium and cost-sharing subsidies, how cost-sharing reduction (CSR) funding has changed over time, Centers for Medicare & Medicaid Services and Academy public statements on CSR load calculations, and why the Academy became involved with the issue. To learn more about the Academy’s work on this topic, visit the health public policy webpage.
The Academy’s annual Call for Volunteers is underway. Whether you are new to the Academy, a member who has not volunteered yet, or an experienced volunteer, we encourage you to take the survey, which will run through Sept. 6.
Issue Brief Offers Health Equity Overview
A Health Equity Committee issue brief released in August, Health Benefit Design Innovations for Advancing Health Equity: Removing the Barriers to Successful Implementation—Issue Brief 1: Overview, provides an overview of issues related to designing health benefits to improve health equity. This issue brief is the first in a new series that will explore potential strategies for incorporating more equity-enhancing features into health insurance benefit designs. The series will draw insights from focused workshops and other conversations that are being held with a variety of stakeholders and decision-makers representing various aspects of the health care and health insurance ecosystem.
Save the Date: Mark your calendars for Health Benefit Design Innovations for Advancing Health Equity. This Nov. 15 symposium will explore strategies to incorporate more equity-improving elements into health insurance benefit design. Registration will open in September.
Academy Delivers Health Update at NAIC
Academy volunteers, staff, and fellows presented Aug. 12–16 at the National Association of Insurance Commissioners (NAIC) Summer National Meeting in Seattle. Senior Health Policy Analyst Matthew Williams presented an update on the Health Practice Council’s 2023 priorities and work in the health arena to members of NAIC’s Health Actuarial (B) Task Force (HATF). HATF publicly thanked the Health Practice Council for its ongoing work and the timeliness of its reports.
Webinars Look at Medicaid Proposed Rules, AG 44
The Medicaid Committee hosted “Overview of CMS’ New Proposed Rules for Ensuring Access to Medicaid Services, and Managed Care Access, Finance, and Quality,” on June 20, featuring officials from the Centers for Medicare & Medicaid Services (CMS) who focused on two recently released notices of proposed rulemaking (NPRMs)—Ensuring Access to Medicaid Services and Managed Care Access, Finance, and Quality. The Academy commented on the proposed rules on June 30.
CMS officials gave an overview of the NPRMs, which are of particular interest to actuaries who work with Medicaid and the Children’s Health Insurance Program (CHIP). Slides and a recording are available free as a member benefit.
Also in June, the Academy’s Group Life Waiver Valuation Table Work Group joined the Society of Actuaries Research Institute (SOARI) for a June 9 health webinar that discussed tables and changes to Actuarial Guideline LXIV (AG 44), which were adopted by the NAIC late last year. The 2023 Group Term Life Waiver Experience Table Report and associated materials is available on the SOA webpage.
- The Health Underwriting Risk Factors Analysis Work Group sent a letter updating the NAIC’s Health Risk-Based Capital (E) Working Group on its progress regarding the NAIC’s request to comprehensively review the H2—Underwriting Risk Component and the Managed Care Credit Calculation in the Health Risk-Based Capital (HRBC) formula.
- Health Equity Committee Vice Chairperson Stacey Lampkin presented on the Academy’s ongoing work on health equity to the Southeastern Actuaries Conference—including the committee’s upcoming 2023 workshops and symposium focusing on the intersection of benefit design and health equity.
Health Highlights for ‘Envision Tomorrow’
The agenda is set for the Academy’s Envision Tomorrow: 2023 Annual Meeting, being held Nov. 13–14 in the nation’s capital. Early registration rates run through Aug. 31—register today and save up to $200 to attend the Academy’s premier event.
Health-focused attendees will hear the latest on prescription drugs costs; behavioral health; and ACA marketplace regulations. Also of interest: back-to-back general sessions on the afternoon of Nov. 14 that will share perspectives from leading and expert voices on the important and multifaceted issues raised by artificial intelligence (AI).
HealthPayerIntelligence cited the Academy issue brief, Drivers of 2023 Health Insurance Premium Changes in a story on employer health plan enrollment this year.
Axios cited comments from speakers at an Academy health webinar on 2024 health insurance premium drivers, and cited the new issue brief. Lincoln, Neb., television station KLKN and nine other TV outlets around the country also covered the issue brief release, as did Fierce Healthcare, Advisor Magazine, BenefitsPro, InsuranceNewsNet, AIS Health, Inside Health Policy, and the Houston Chronicle.
Legislative/Regulatory Activity
Federal
The Biden administration released a notice of proposed rulemaking (NPRM) on July 25 to clarify access to mental health services under the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008. It would require health plans to make changes to their coverage when comparative analyses determine that access to mental health care providers is inadequate or inappropriately restricted; extend MHPAEA protections to state and local governmental plans; and clarify how plans may use prior authorization and other medical management tools within mental and behavioral health benefits.
On July 7, CMS, the Treasury Department, and the Department of Labor unveiled a tri-agency NPRM addressing the use of short-term health insurance plans, as well as imposing new restrictions on specific excepted benefit plans, including hospital and other fixed indemnity products. The Biden administration also released new surprise billing guidelines that aim to limit potential loopholes and offer additional protection to ensure patients don’t end up with unexpected costs.
President Biden on June 23 signed an Executive Order intended to strengthen access to contraception. The order directs the secretaries of the Treasury, Labor, and Health and Human Services (HHS) to consider new guidance to ensure that private health insurance under the ACA covers all FDA-approved, -granted, or -cleared contraceptives without cost sharing. The executive order also calls on the departments of HHS, Labor, and Treasury to consider new actions to improve access to affordable over-the-counter contraception, including emergency contraception.
On July 19, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) proposed draft guidelines to address how mergers could affect competition. These guidelines would affect several industries, including food and agriculture and health care.
On Aug. 21, CMS issued draft guidance on the new Medicare Prescription Payment Plan program to allow Medicare beneficiaries to pay for their prescription drugs out-of-pocket (OOP) in monthly payments by spreading out cost sharing over the year.
CMS’ Office of the Actuary released its 2022–2031 national health expenditure projections of health care spending, which are tracked by the source of funds, type of service, and by sponsor.
On Aug. 22, the U.S. Preventive Services Task Force, a nongovernmental advisory group whose members are appointed by the Director of the Agency for Healthcare Research and Quality (AHRQ), expanded the list of drugs it recommends to prevent HIV infection to include two new drugs. The ACA requires private insurers to cover these drugs with no cost-sharing (requirement begins in a year from now). One is a pill, the other is a long-lasting injectable.
The House Energy and Commerce Committee advanced HR 824 on July 19, legislation that would allow employers to offer telehealth coverage as a standalone benefit outside of traditional health care plans. The measure would qualify standalone telehealth plans as an “excepted benefit” that do not have to follow certain consumer protection laws that group health plans typically have to follow, similar to dental and vision plans offered by many employers. It was previously approved by the House Education and Workforce Committee on June 13.
The House on June 21 approved HR 3799, which codifies a Trump administration rule allowing employers to offer health reimbursement arrangements, which provide employees employer-funded accounts to purchase insurance on the individual market exchanges. It also allows small businesses and self-employed people to band together to buy health insurance and form association health plans.
The Senate Health, Education, Labor and Pensions Committee approved five health bills on June 15 that would reauthorize and modify research and specifications for federal Alzheimer’s, diabetes, sickle cell disease, and emergency care programs. They are S 133, which would extend the National Alzheimer’s Project through 2035; S 134, which would require the National Institutes of Health to submit an annual estimate of expected costs for the National Alzheimer’s Project to the president and Congress; S 1852, which would reauthorize the sickle cell disease prevention and treatment grant program through fiscal 2028; S 1855, which would reauthorize two federal diabetes programs through the end of 2025; and S 265, which would reauthorize a rural emergency medical service training and equipment grant program through fiscal 2028. All were approved with bipartisan support.
Injured parties can still sue states for violating federal safety net programs like Medicaid and Medicare after the U.S. Supreme Court on June 8 refused to overturn longstanding precedent. Justices, by a 7-2 vote, refused to adopt a wholesale rule carving out so-called spending clause legislation from a federal law that allows people to sue for civil rights violations.
The House Ways & Means Committee on June 7 approved a bill (HR 1843) that would permanently allow high-deductible health plans to cover telehealth before customers hit their deductibles. It also passed HR 3800, legislation that permits employers to offer pre-deductible coverage of 14 chronic care health services for employees using a high-deductible health plan.
State
New Jersey Gov. Phil Murphy signed into law A 536 on July 10, which sets new transparency standards for pharmacy benefits manager business practices. The law requires that pharmacy benefits managers apply for a license and pharmacy services administrative organizations register with the state Department of Banking and Insurance every three years. It also requires the Department of Banking and Insurance to establish certain minimum standards for the issuance of licenses to pharmacy benefits managers.
Montana Gov. Greg Gianforte signed SB 516 into law on July 5, which requires insurance plans to cover fertility preservation services for cancer patients in the same way that providers do for other medically necessary care. Under the law, cancer patients would have to be notified of their option for fertility preservation services.
Georgia Gov. Brian Kemp signed into law HB 295 on July 1. The measure revamps consumer protections against surprise billing for health care services in the state. While it provides grounds for new violations of unfair claims settlement practices, it also revises previous language that hindered efforts to enforce earlier legislation.
On June 29, California Gov. Gavin Newsom signed into law a measure reinstating a tax on managed care organizations, which will result in the state receiving billions of dollars in federal funding. AB 119 is one part of the budget package for the fiscal year that started July 1. The state now needs to seek federal approval for the tax from CMS.
On June 27, Connecticut Gov. Ned Lamont signed into law HB 6669, legislation that calls for Connecticut to either create its own or join with other states to form a discount drug program to lower prescription drug costs. The law also requires pharmaceutical sales representatives to register with the state annually and mandates drug pricing information be made available to pharmacists in the state.
On June 22, Florida Gov. Ron DeSantis signed HB 967, which requires the Florida Agency for Health Care Administration (AHCA) to provide coverage for continuous glucose monitors for certain Medicaid recipients, establish requirements for Medicaid recipients to continue receiving coverage for their continuous glucose monitors, and requires the AHCA to seek federal approval for implementation of the measure, if needed.
On June 21, Rhode Island Gov. Dan McKee signed HB 5426/SB 23, legislation that guarantees availability of health care insurance coverage in the state while barring the exclusion of residents due to preexisting health conditions.
On June 18, Texas Gov. Greg Abbott signed SB 2475 into law. It prohibits ground-ambulance services provided by municipalities in the state from engaging in balance billing.
On June 10, Nevada Gov. Joe Lombardo approved AB 7, legislation that requires require health care providers to use interoperable electronic health records, requiring that the interoperable electronic health records are easily accessible to patients, and that they are capable of being shared between providers by 2028.
On June 7, Oregon Gov. Tina Kotek signed SB 608, legislation that directs the Oregon Health Authority (OHA) to conduct a survey of retail pharmacy providers that are enrolled as Medicaid providers in the state medical assistance program every three years.
On May 30, Colorado Gov. Jared Polis signed HB 23-1228 into law a measure that adjusts the supplemental Medicaid payment rates a qualifying nursing facility receives from the Department of Health Care Policy and Financing. Current law limits the annual increase of the general fund share to 3%. The law removes this limitation and requires the general fund share be calculated based on specific percentage increases.
On May 17, Tennessee Gov. Bill Lee signed SB 1345/HB 1503, companion bills that require an insurer that provides benefits covering emergency medical services to pay for those services without the need for a prior authorization determination, regardless of whether the health care provider or facility furnishing those services is a participating provider or facility.