Gayle is joined by Daniel Cruz, health actuary and consultant, to discuss the state of the actuarial profession in light of recent communications about rating of Affordable Care Act plans.
The actuarial profession plays an important role in safeguarding the institution of insurance for the benefit of society. We are a self-regulated profession. We rely on a combination of standards of practice, professionalism, examinations, continuing education, and a disciplinary review process to ensure that we fulfill our obligations to the public ourselves, without oversight or control from outside the actuarial profession.
Gayle mentioned two recent communications related to ACA rating, which cause her to wonder what is happening behind the scenes. Why are committees of the American Academy of Actuaries apparently implying that actuaries don’t have to follow laws and regulations when it comes to ACA rating, while patient advocacy groups are warning Health and Human Services that actuaries are not following rating rules? Beyond the questions about the actions of actuaries rating ACA plans, these communications create concern about the AAA’s procedures for writing such letters. What is the procedure for AAA committees to make pronouncements about how actuaries should do their jobs? Are views of all ACA pricing actuaries solicited and considered before sending the letter to the government agency charged with regulating ACA plans? If not, does that call into question the ability of the actuarial profession to self-regulate?
With the stage set with these questions, Gayle was joined by Daniel Cruz. Daniel took us back through the history of the ACA marketplace and explained that the single risk pool requirement was not enforced in the chaos that unfolded in the first couple years of the ACA marketplace. You’ll recall that numerous carriers left the market and others raised rates dramatically to ensure they could get to profitability and continue to offer ACA plans going forward. At first it was not clear what precisely had happened, but everyone breathed a sigh of relief when the ACA marketplace stabilized, and carriers began to return.
Continuing the story, Daniel explained how the problem became clearer after cost-sharing reduction payments were ceased and changes were made to the ACA subsidy system starting in the 2018 plan year. Daniel shared his views of why the failure to follow the single risk pool requirement has not been remedied, and why it is coming to light now. He explained how the interests of consumers are not being protected when the ACA single risk pool requirement is not enforced.
While it would be preferable for challenges facing actuarial practice to be discussed in an open, transparent and timely manner so that we can collectively ensure we fulfill our obligations to the public, it’s not too late. Daniel left us with a possible silver lining. He suggested that perhaps we are turning the corner on this issue; perhaps the letters signify that the actuarial profession is ready to have the conversation we should have had four years ago and show that we can self-regulate.
This actuary hopes he is right.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Gayle has launched the Primary Care Mindset newsletter and is soon launching the podcast Nurturing the Heart of Family Practice. Subscribe here https://subscribepage.io/primarycaremindset
Gayle is joined by Daniel Cruz, health actuary and consultant, to discuss the state of the actuarial profession in light of recent communications about rating of Affordable Care Act plans.
The actuarial profession plays an important role in safeguarding the institution of insurance for the benefit of society. We are a self-regulated profession. We rely on a combination of standards of practice, professionalism, examinations, continuing education, and a disciplinary review process to ensure that we fulfill our obligations to the public ourselves, without oversight or control from outside the actuarial profession.
Gayle mentioned two recent communications related to ACA rating, which cause her to wonder what is happening behind the scenes. Why are committees of the American Academy of Actuaries apparently implying that actuaries don’t have to follow laws and regulations when it comes to ACA rating, while patient advocacy groups are warning Health and Human Services that actuaries are not following rating rules? Beyond the questions about the actions of actuaries rating ACA plans, these communications create concern about the AAA’s procedures for writing such letters. What is the procedure for AAA committees to make pronouncements about how actuaries should do their jobs? Are views of all ACA pricing actuaries solicited and considered before sending the letter to the government agency charged with regulating ACA plans? If not, does that call into question the ability of the actuarial profession to self-regulate?
With the stage set with these questions, Gayle was joined by Daniel Cruz. Daniel took us back through the history of the ACA marketplace and explained that the single risk pool requirement was not enforced in the chaos that unfolded in the first couple years of the ACA marketplace. You’ll recall that numerous carriers left the market and others raised rates dramatically to ensure they could get to profitability and continue to offer ACA plans going forward. At first it was not clear what precisely had happened, but everyone breathed a sigh of relief when the ACA marketplace stabilized, and carriers began to return.
Continuing the story, Daniel explained how the problem became clearer after cost-sharing reduction payments were ceased and changes were made to the ACA subsidy system starting in the 2018 plan year. Daniel shared his views of why the failure to follow the single risk pool requirement has not been remedied, and why it is coming to light now. He explained how the interests of consumers are not being protected when the ACA single risk pool requirement is not enforced.
While it would be preferable for challenges facing actuarial practice to be discussed in an open, transparent and timely manner so that we can collectively ensure we fulfill our obligations to the public, it’s not too late. Daniel left us with a possible silver lining. He suggested that perhaps we are turning the corner on this issue; perhaps the letters signify that the actuarial profession is ready to have the conversation we should have had four years ago and show that we can self-regulate.
This actuary hopes he is right.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Gayle has launched the Primary Care Mindset newsletter and is soon launching the podcast Nurturing the Heart of Family Practice. Subscribe here https://subscribepage.io/primarycaremindset