Tag: Premiums
Commonwealth Fund issue brief estimates impact of the MLR rule
Posted by mmcdowell on April 6, 2012
One of the most visible consumer protections in the Affordable Care Act (ACA) is the requirement that health insurers pay out at least 80 percent to 85 percent of premium dollars for medical care expenses. Insurers that pay out less than this minimum “medical loss ratio” (MLR) must rebate the difference to their policyholders, starting in 2011. Using insurers’ MLR data from 2010, the Commonwealth Fund recently released an issue brief estimates the rebates expected in each state if the new rules had been in effect a year earlier. Nationally, consumers would have received almost $2 billion of rebates if the new MLR rules had been in effect in 2010. Almost $1 billion would be in the individual market, where rebates would go to 5.3 million people nationally. Another $1 billion would go to policies covering about 10 million people in the small- and large-group markets.
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Update on the Final Rule: Standards Related to Reinsurance, Risk Corridors and Risk Adjustment
Posted by Mark Dorley on April 4, 2012
The reinsurance, risk corridor and risk adjustment programs, established under the ACA at sections 1341, 1342 and 1343, respectively, were developed to mitigate possible health insurance adverse selection and to maintain stable premiums in the individual and small group markets as implementation of the ACA’s insurance market reforms and health insurance Exchanges begin in 2014. Under ACA section 1341, each state must establish a temporary reinsurance program for years 2014-2016 to help stabilize premiums for coverage of high-risk individuals in the private market. Section 1342 of the ACA requires the HHS Secretary to establish a temporary risk corridor program…
HHS deems premium spikes unreasonable
Posted by mmcdowell on January 12, 2012
Today, the U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced that HHS has deemed insurance premium increases in five states as “unreasonable.” HHS determined that Trustmark Life Insurance Company has proposed unreasonable health insurance premium increases in five states—Alabama, Arizona, Pennsylvania, Virginia, and Wyoming. The excessive rate hikes would affect nearly 10,000 residents across these five states. To make these determinations, HHS used its “rate review” authority from the Affordable Care Act (ACA) to determine whether premium increases of over 10 percent are reasonable. In these five states, Trustmark has raised rates by 13 percent. HHS determined that the rate increases were unreasonable because the insurer would be spending a low percent of premium dollars on actual medical care and quality improvements, and because the justifications were based on unreasonable assumptions.
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Oliver Wyman report finds insurer fees will increase premiums
Posted by mmcdowell on October 31, 2011
A new report commissioned by the insurance industry and authored by Oliver Wyman, “Estimated Premium Impacts of Annual Fees Assessed on Health Insurance Plans,” quantifies the impact of insurer fees on private and public sector coverage. According to the report, the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) have both concluded that such fees will increase insurance premiums. The analytical data presented in the report estimates that the insurer fees will increase premiums in fully insured coverage markets by an average of 1.9% to 2.3% in 2014. This translates into a $2,800 average increase in individual coverage cost, and $6,800 for a family over a 10-year period, beginning in 2014.
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Health Affairs article estimates that ACA would still cover 23 million without individual mandate
Posted by mmcdowell on October 27, 2011
Many policy gurus fear that repeal of the minimum coverage provision and corresponding penalty from the Affordable Care Act (ACA) would lead to adverse selection and thus a premium spiral. However, a recent Health Affairs article highlights other ACA provisions that would mitigate the negative repercussions of an individual mandate repeal. For example, the ACA subsidies to help people purchase coverage would restrain a premium spiral by absorbing much of the impact of premium increases. The article proffers that without the individual mandate, 7.8 million people would lose coverage, as opposed to other estimates in the 16-24 million range. In sum, the ACA would still cover 23 million people who otherwise would have been uninsured. Although the individual mandate would have important effects, the article says, perhaps it is not crucial to the successful implementation of health reform.
CRS paper identifies potential issues with MAGI redefinition
Posted by mmcdowell on October 25, 2011
The Congressional Research Service (CRS) released a paper pertaining to Congress’s moves to redefine modified adjusted gross income (MAGI) to include Social Security income. CRS cites three issues that Congress should consider if the definition of income is changed. First, because MAGI can be computed largely from federal tax return information, verification of income is streamlined. Thus, by including additional provisions, there will be increased administrative complexity involved with calculating an individual’s MAGI. Second, the original definition was developed to promote coordination between Medicaid and premium credits in the health insurance exchange. Thus, this definition change should not only apply to income definition for Medicaid, but also should apply to premium credits. Third, bill proposals have focused largely on the inclusion of Social Security benefits in MAGI for eligibility purposes. However, many other low-income programs include other types of income and asset holdings that are also excluded from MAGI.
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Bay Area Council offers guidance to promote a more affordable, higher-quality system without Washington
Posted by mmcdowell on October 20, 2011
The California trade group, Bay Area Council, recently published the report, “Roadmap to a High-Value Health System: Addressing California’s Healthcare Affordability Crisis,” to address the skyrocketing health care costs in California. The report suggests ways in which employers, insurers, and health care providers can help build a more affordable, higher-quality health care system, without Washington’s help. According to the paper, the overwhelming majority of health care costs stem from emergencies. Thus, the council urges insurers and self-insured businesses to reward doctors and hospitals for keeping their patients healthy, rather than treating those who are sick. On the consumer side, the council suggests that members of health plans be encouraged to avoid chronic disease through lower premiums or cash incentives for meeting fitness goals. As for state policy makers, the council calls for them to support nascent private sector models. Additionally, the paper highlights a particularly critical task as setting up a successful California Health Benefit Exchange.
Update: Health Insurance Premium Tax Credits
Posted by Mark Dorley on September 2, 2011
This Update is the third in a series on a group of three regulations, all of which are summarized at HealthReformGPS.org. Together the rules are designed to implement both the Medicaid eligibility expansions, the process of determining eligibility for premium tax credits and cost sharing assistance in the Exchange individual market, and standards for employers purchasing coverage in Exchanges. Collectively, the rules are designed to allow individuals and families to acquire and keep coverage and move more seamlessly among publicly-supported sources of health insurance as family income and circumstances change.
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HHS and IRS release NPRMs on exchange eligibility, tax credits, medicaid expansion
Posted by Mark Dorley on August 12, 2011
The U.S. Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS) have released Notices of Proposed Rulemaking (NPRM) on Exchange eligibility and insurance premium tax credits, respectively. Additionally, the Centers for Medicare and Medicaid Services (CMS) has released an NPRM related to the Medicaid eligibility expansion authorized by the Affordable Care Act (ACA).
All three NPRMs are designed to simplify Exchange eligibility and enrollment by coordinating with state Medicaid agencies and the IRS to determine eligibility for premium tax credits and Medicaid under the new expanded eligibility rules laid out in the ACA. Also addressed in the proposed rules is the eligibility and calculation of tax credits for small businesses.
For more information on the Medicaid eligibility expansion, click here. For more information on tax credits, click here. For more information on Exchange eligibility, click here. Finally, for more information on tax credits for small businesses, click here.
New assessment by KFF experts examines how debt deal could affect health reform
Posted by Mark Dorley on August 4, 2011
A new analysis by experts at the Kaiser Family Foundation (KFF) assesses how the new Debt Ceiling legislation might affect premium and cost-sharing subsidies created by the Affordable Care Act (ACA). The analysis, authored by Larry Levitt and Gary Claxton, explains that while premium subsidies are safe from any spending cuts recommended by the “Super Committee,” cost-sharing subsidies would be fair game.
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- Treasury issues final rules on premium tax credits
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- Heritage Foundation Recommends Eliminating Premium Subsidy for High Income Beneficiaries to Shore-Up Medicare
- Update: Medical Loss Ratio Requirements
