Academy Activities

In late October, the Individual Disability Tables Work Group submitted to the National Association of Insurance Commissioners’ (NAIC) Health Actuarial Task Force a revised final report and actuarial guideline on a new individual disability table. The report will be discussed formally at the upcoming NAIC fall meeting in Washington, D.C.

The Medicare Supplement Work Group submitted to the NAIC’s Medicare Supplement Refund Formula Subgroup an analysis of and recommended changes to the Medicare Supplement Rate Refund Formula. Similar to the final individual disability tables report, the recommendations of the work group will be discussed at the fall NAIC meeting later this week.

The Medicaid Work Group submitted a letter to the Centers for Medicare and Medicaid Services (CMS) on the introduction of Sovaldi and other new Breakthrough Therapy Designation medications and their potential impact on Medicaid costs.

Legislative/Regulatory Updates

On Oct. 7, CMS released a FAQs sheet regarding the Health Insurance Providers (HIP) Fee for Medicaid Managed Care Plans under the Affordable Care Act (ACA). The FAQ provides guidance on a number of questions received from states, actuaries, and health plans about the HIP fee.

On Oct. 23, CMS issued a proposed methodology for determining federal funding for the Basic Health Program (BHP) in program year 2016. The proposed methodology is the same as used in the final 2015 payment notice and calculates monthly payment rates for each state for various rate cells. The proposed methodology also gives states the option to use either the 2016 exchange premiums or the 2015 premiums projected forward by an estimated trend rate to calculate the BHP payment rates. CMS plans to finalize the methodology by February 2015.

On Nov. 4, the Department of Health and Human Services and the Department of the Treasury, including the Internal Revenue Service, announced plans to propose rules to address concerns that some group health plans can satisfy the requirements for providing minimum value (MV) without providing in-patient hospitalization coverage. According to Notice 2014-69, plans without substantial coverage for in-patient hospitalization or for physician services (or for both) fail to provide the MV intended by the MV requirement. As a result, the departments note that proposed regulations will be issued soon and final regulations are targeted for completion on or around March 1, 2015.

In the News/Media Activities

USA Today reached out to Senior Health Fellow Cori Uccello for an actuarial perspective on news that federal health officials plan to change the MV test to no longer allow large employers to offer health insurance plans that lack hospitalization coverage. The story was published on Nov. 3 in USA Today and republished by several outlets and network affiliates including the (Pittsburgh) Tribune-Review, (Port Clinton, Ohio) News Herald, (Tampa, Fla.) CBS 10, and (Buffalo, N.Y.) NBC 2.

Modern Healthcare spoke to Barbara Klever, chairperson of Risk Sharing Work Group, for insight on the risk mitigation role of the ACA’s risk corridors.

A Health Affairs Blog post that provides a technical review of the MV calculator mentioned the Academy, noting, “MV may be established for nonstandard plans through an actuarial certification provided by a member of the American Academy of Actuaries.”

The Lund Report, an independent health news site focused on Oregon’s health care system, asked Health Practice Council member Donna Novak to explain the basic principles behind risk-based capital in a subscriber-only story examining health insurance company capital reserves. Novak, who worked with the NAIC in developing the risk-based capital benchmark, explained some of the actuarial considerations involved in determining the benchmark, saying “The risks for an insurer primarily revolve around the underwriting risk, which is a function of premium claims levels. There are also other risks measured. There’s the risk of their asset portfolio [underperforming].  There is business risk, which might revolve around administrative costs.”

Upcoming Events

Health Insurance Marketplaces, Round II: Results and Expectations
Briefing: Nov. 14, 12:00 p.m.-1:30 p.m. EST, Washington, D.C. (no fee charged)
Sponsors: Alliance for Health Reform and the Commonwealth Fund

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