Yesterday, HHS published proposed the framework for states to the implement Insurance Exchanges – a marketplace where consumers and small businesses can compare and shop for insurance plans. But many questions remain. How will these provisions interact with medical loss ratio requirements, which requires insurance companies to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement? How will the guidelines impact the influx of new, previously uninsured consumers? What about other sources of uncertainty that could affect how insurers price their products?
Although there is some past experience and research to help predict the effect the various insurance-related provisions by themselves, there is little or no evidence about how they will interact to influence premiums and market dynamics. In April 2011, the Robert Wood Johnson Foundation’s Changes in Health Care Financing and Organization (HCFO) Initiative sponsored an invitational meeting to foster discussion among expert researchers, policymakers, insurers, actuaries, and analysts focused on insurance pricing in the individual and small group markets once the Patient Protection and Affordable Care Act (ACA) is fully implemented on January 1, 2014. NovaRest’s Donna Novak was the moderator of this discussion. A new brief summarizes the meeting’s discussion, including important considerations such as communication between federal and state policymakers tasked with implementation, risk adjustment methodology, expectations relative to implementation goals, and regulatory guidance. Read more