Archive of health reform

11Apr2012
Fiscal Effects of the Affordable Care Act Thumbnail

Fiscal Effects of the Affordable Care Act

by Ian Duncan, University of California - Santa Barbara An important new paper by Charles Blahous of George Mason University (and a Social Security and Medicare Trustee) has just been published. 

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Actuarial principles at play in Supreme Court health care case Thumbnail

Actuarial principles at play in Supreme Court health care case

by Sara Teppema, SOA senior staff fellow, practice research On Tuesday of this week, the U.S. Supreme Court wrapped up the second of four sets of arguments in the historic case involving the 2010

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06Mar2012
Latest national healthcare expenditures Thumbnail

Latest national healthcare expenditures

by Ian Duncan, University of California - Santa Barbara The recent release of National Healthcare Expenditure data for 2010 shows a very slight uptick.  What is more interesting, though, is the lo

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Accountable care organizations: Extending the techniques nationwide Thumbnail

Accountable care organizations: Extending the techniques nationwide

by Greger Vigen, FSA Given rising health costs and continuing uneven quality, major players in the health care industry (hospitals, physician groups, insurance companies and professionals like actu

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Health care costs Thumbnail

Health care costs

by Jim Toole, managing director, life & health, FTI Consulting According to the Office of the Actuary, U.S. health spending grew more slowly in 2009 and 2010 than at any time since Medicare was signed into law.  Driven by the recession, Americans delayed hospital care, avoided emergency room visits, and changed the way they purchased prescription drugs, reducing the growth in health spending close to the rate of the economy overall. Despite this, health insurance premiums grew faster than insurance spending, and the overall margins that insurers enjoyed increased.  Some insurers were charging higher rates to address the uncertainty posed by the PPACA, but in general the costs associated with the changes in law have yet to materialize. Health benefit plan costs rose at rates higher than the rate of spending, squeezing margins and reducing the competitiveness of U.S. businesses internationally.  Businesses responded by pushing more costs to employees, reducing overall benefits and switching to higher deductible plans with lower premiums.  (more…)

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19Jan2012
On the edge of a new age of healthcare financing Thumbnail

On the edge of a new age of healthcare financing

by Ian Duncan, University of California - Santa Barbara When I entered health actuarial work 31 years ago, the absolute cost of health benefits was much lower (although as a percentage of average nominal income the difference is less than is sometimes recognized).  Plans reimbursed allowable expenses for eligible members without much interference. Insurers employed claims payers and actuaries; medical directors were involved in underwriting, if at all. All that has changed with managed care.  The managed care revolution was successful in its early days (zero and even negative trends for HMOs in the mid-1990s) but consumers revolted against the limited choice and trend began its rise.  At the same time there was an explosion of new, life-extending devices and drugs which added to cost. I think we have learned a few things along the way, including the fact that providing consumers with insurance increases consumption (hardly surprising but overlooked in the scramble for reform). We stand on the edge of a new age of healthcare financing, in which the old insurance model is effectively outlawed (no longer can we underwrite, exclude pre-existing conditions or charge a rate appropriate for the risk). I don’t believe that this model will be any more successful than prior models at containing costs, and will lead in

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05Jan2012
Essential health benefits – How will they be defined? Thumbnail

Essential health benefits – How will they be defined?

by Dan Pribe, consulting actuary, Optuminsight Imagine you’re a committee member for your state’s Medicaid program.  Your committee must decide the Essential Health Benefit (EHB) package provided to Medicaid beneficiaries while keeping within the budget your state legislature has provided.  Through some rather contentious meetings, you’ve all agreed to a package which includes most medications and services, but excludes some very expensive ones such as Elaprase, a medication costing nearly $400,000 per year to cover Hunter’s Syndrome, an extremely rare metabolic disorder affecting about 500 people in the United States.  Now imagine you come home from work a few weeks later and in some weird twist of fate your spouse informs you that your child has been diagnosed with Hunter’s syndrome.  You realize that if you had been on Medicaid, you’d be out of luck. While this particular situation is highly unlikely, it does draw our attention to how the EHB package required under the Patient Protection and Affordable Care Act (ACA) will be determined.  (more…)

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20Dec2011
Come one, come all! Actuaries as ringmasters Thumbnail

Come one, come all! Actuaries as ringmasters

by Mary Hegemann, senior consulting actuary, Wakely Consulting Group Comparing politicians to the circus is not a new concept, but the Affordable Care Act (ACA) has brought this comparison to a whole new big tent.  Some state politicians are quite the attractions, refusing to budge when it comes to planning for ACA implementation.  I feel like actuaries need to be the little monkeys at the circus clanging cymbals while riding a bicycle trying to get everyone’s attention (oh wait, maybe that was Curious George).  It’s not that doomsday is coming.  It’s that politics are getting in the way of preparation, and by the time the politics get sorted out, we may end up with an elephant-sized mess. Take risk adjustment for example.  Under the ACA, beginning in 2014 risk adjustment will be incorporated in the individual and small group markets in all states.  States without exchanges will default to having the feds administer risk adjustment.  States with exchanges can choose to administer risk adjustment on their own or to have the feds administer it for them.  (more…)

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Book Review: Health Care Will Not Reform Itself Thumbnail

Book Review: Health Care Will Not Reform Itself

Credit: Jared RodriquezWe are vociferous readers at the Society of Actuaries and we want to pass on our review of a book that has gained renewed interest in health care circles. In his New York Times best seller, Health Care Will Not Reform Itself: A User’s Guide to Refocusing and Reforming American Health Care, Kaiser Permanente CEO George Halvorson addresses the inadequacies with the U.S. health care system and improvements that can be achieved through health care reform, which is “within our reach.” This book came out in 2009 as Congress prepared to debate the Patient Protection and Affordable Care Act. As the ACA heads to the Supreme Court it is interesting to look back at the arguments Halvorson put forth. (more…)

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23Nov2011
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SOA Blog
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Healthcare
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Healthcare reform goes to the high court Thumbnail

Healthcare reform goes to the high court

Last week, the U.S. Supreme Court announced that it would weigh the legality of President Barack Obama’s healthcare reform bill, the Patient Protection and Affordable Care Act (PPACA), in the first few months of 2012. Below you will find a summary of the issues at hand and thoughts on what needs to be discussed before the Supreme Court weighs in. The bottom line is that the Supreme Court has agreed to hear oral arguments to decide the constitutionality of the healthcare law’s requirement for individuals to buy insurance. Conclusions by the high court will likely come down in late June -- right before the Republican and Democratic conventions and smack dab in the middle of the 2012 presidential season. (more…)

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