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In a new issue brief, Actuarial Value under the Affordable Care Act, the Academy’s Actuarial Value Subgroup offers an overview of the concept of actuarial value and its calculation under the Affordable Care Act (ACA).
On behalf of the Academy’s Medicare Steering Committee, Cori Uccello, the Academy’s senior health fellow, and Tom Wildsmith, the vice president of the Health Practice Council, submitted written testimony to the House Ways and Means Subcommittee on Health for a hearing on the 2011 Medicare Trustees Report.
The Academy’s Rate Review Work Group has submitted comments to the Centers for Medicare & Medicaid Services in response to the revised preliminary justification and consumer disclosure forms for purposes of rate review disclosure and reporting requirements.
The Community Living Assistance Supports and Services (CLASS) Act’s lack of affordability, absence of a material underwriting, and need for a significant level of internal subsidies, are some of the concerns that the Academy has with the program, Steve Schoonveld, co-chairperson of the Joint Academy/Society of Actuaries CLASS Act Task Force, told attendees at the July 16 National Conference of Insurance Legislators (NCOIL) meeting in Newport, R.I. Schoonveld discussed some of the changes to the CLASS Act being considered by the Department of Health and Human Services (HHS), such as increasing the employment and earnings requirement and indexing premiums to rise along with benefits. He also highlighted the Academy’s recommendations for making the program stronger by using an underwriting approach for covering spouses who are not actively at work, adding opt-out and subsequent opt-in restrictions, and providing benefits that are paid based on a reimbursement basis rather than a cash basis.
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Legislative and Regulatory Updates
 The U.S. Court of Appeals for the 6th Circuit has upheld a District Court ruling in Thomas More Law Center vs. Barack Obama, that the individual mandate provision of the ACA is constitutional. The constitutionality of the mandate ultimately is expected to be decided by the U.S. Supreme Court.
HHS recently issued proposed regulations implementing several provisions of the ACA:
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Establishment of Exchanges and Qualified Health Plans. Health benefit exchanges, which should be operational by Jan. 1, 2014, are intended to provide a marketplace for individuals and small employers to compare private health insurance options on the basis of price, quality, and other factors.
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Standards Related to Reinsurance, Risk Corridors, and Risk Adjustment. The proposed rule puts into effect the risk-sharing mechanisms in ACA—reinsurance, risk corridors, and risk adjustment. The risk-sharing provisions are intended to mitigate the impact of adverse selection and stabilize premiums in the individual and small group markets as insurance reforms and the new benefits exchanges are implemented.
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Establishment of Consumer Operated and Oriented Plan (CO-OP) Program. The CO-OP program provides loans to encourage the creation of consumer-governed, private, nonprofit health insurance issuers to offer qualified health plans in the insurance exchanges. The program will expand the number of health plans available in the exchanges with a focus on integrated care and greater plan accountability.
Comments on the rules addressing the establishment of exchanges and risk–sharing mechanisms are due by Sept. 28. Comments on the rules addressing the CO-OP program are due by Sept. 16.
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In The News/Media Activities
A January 2010 technical report by the Academy and Society of Actuaries regarding the excise tax contained in then-proposed health care reform legislation was cited in an op-ed by Rep. Joe Courtney that was published by the Huffington Post on July 7. The report highlighted some of the unintended consequences of the excise tax as proposed in the legislation. The actuaries wrote that they were concerned that premiums would be used to measure the comprehensiveness of benefits, when in actuality premium levels are determined by numerous factors and are not necessarily a reflection of benefit richness. If premiums were to be the gauge, employers may stop offering pre-65 retiree coverage—not because the benefit packages are too generous, but because the premiums for this age cohort tend to be high. The actuaries also were concerned that small-employer groups and high-risk occupation workers similarly would be disproportionally affected.
News links are to external websites. The Academy is not responsible for the content of these websites.
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