SIPF Goes to the Health Meeting

By Marilyn McGaffin and Stephanie Entzminger

In The Public Interest, September 2022

The 2022 Health Meeting in Philadelphia was the first in-person Health Meeting since 2019. Over 600 attendees were present at an event that felt like a reunion. The agenda covered everything from new research to innovative modeling techniques to regulatory and program updates. Many actuaries working in Medicaid and Medicare Advantage were able to find sessions in their fields of interest, including some sponsored by the Social Insurance and Public Finance section.

For those who missed the meeting and are looking for the highlights of the social insurance and public policy-focused sessions, we have provided a recap below!

Social Insurance and Public Policy Sessions

There were four sessions classified as “Social Insurance,” including two sponsored by SIPF. There were also five sessions classified as “Public Policy, Law & Regulation,” though three of these were dually categorized under Social Insurance:

• “Current 1115 Waiver Themes: Do They Follow CMS’ Strategic Vision?” (social insurance, public policy)
• “Paid Family Leave—What an Actuary Needs to Know” (social insurance, public policy, SIPF sponsored)
• “Medicare and Medicaid Update” (social insurance, SIPF sponsored)
• “A Conversation with Former MedPAC and MACPAC Commissioners” (social insurance, public policy)
• “Medicare Advantage: Looking Back and Looking Forward” (public policy)
• “The Converging Forces of Health Care Price Transparency” (public policy)

SIPF-Sponsored Sessions

The SIPF Section sponsored two sessions:

• “Paid Family Leave—What an Actuary Needs to Know,” moderated by Marilyn McGaffin and presented by Rodney A. Hill and Lisa Shaffer
• “Medicare and Medicaid Update,” moderated by Yixuan Song and presented by Sterling Arthur Felsted and Lynn Nonnemaker

Below, we provide a summary of each Section-sponsored session.

Paid Family Leave—What an Actuary Needs to Know

Rod Hill and Lisa Shaffer from Aon presented the session on Paid Family Leave. To begin they gave a timeline of Paid Family Leave. California passed the first Paid Family Leave regulations in 2002. The next state, New Jersey, passed similar legislation in 2008. In 2013, Rhode Island passed paid family leave. Since 2016, seven states and Washington, D.C. have passed Paid Family Leave. In March 2020 the Federal government mandated 80 hours of Paid Family Leave to address the public health emergency of COVID. This mandate has since expired. 

There are critical concepts that impact actuarial analysis of paid family. The first is that programs are generally paid for by both employers and employees. Most states allow for private plans through an opt-out provision. These private plans tend to be better managed, with employees receiving pay in a timely manner. Benefits can be run concurrently with other leave programs. Employers evaluate many pros and cons to the various funding options. If an employer selects to go with the state fund, the employer registers with the state and remits payments to the state. Then the employees apply with the state to receive benefits.

More than 70 percent of Paid Family Leave claims are due to short-term disability events. Contributions to a state plan start anywhere from six to 12 months prior to accepting claims. Benefits are higher for lower wage earners. The public health crisis due to COVID-19 exposed the need for paid family leave. Six of the 11 states (I have included Washington, D.C. as a state here) have contributions from the employer be optional; five of the states have mandatory contributions from the employer.  However, 10 of the states, but not Washington, D.C., have employee contributions be mandatory. Taxability of the benefits is a critical issue when forecasting claims costs and replacement ratios for these programs. States claim the biggest challenge is in forecasting these claim costs and accurate funding.

The session closed with how Connecticut implemented the Paid Family Leave.

Medicare and Medicaid Update

The Medicare and Medicaid Update session was divided into two distinct parts. First, AHIP’s Lynn Nonnemaker discussed Medicare. She highlighted Centers for Medicare and Medicaid Services’ current strategic pillars, noting that items of importance to CMS are likely to be of importance to Medicare Advantage organizations as well. The pillars included advancing equity, driving innovation, and protecting programs, as the projected insolvency year for the Hospital Insurance Trust Fund was recently pushed back but still expected to occur by 2028.

Lynn also highlighted CMS’s goal of having all Medicare beneficiaries in a “care relationship with accountability for quality and total cost of care” by the end of the decade. Some of the shift to accountable care will occur via new Center for Medicare & Medicaid Innovation models such as the ACO REACH program. This program is a redesign of the Global and Professional Direct Contracting Model which was discussed in an SIPF-sponsored seminar at the 2021 Health Meeting. Lynn ended her presentation with a discussion of D-SNPs and Star ratings.

The second half of the presentation focused on redetermination in the Medicaid program. For the remainder of the Public Health Emergency, Medicaid beneficiaries cannot lose their insurance coverage, even if they technically become ineligible for benefits. When the Public Health Emergency ends, state Medicaid programs will be faced with the task of disenrolling members who are no longer eligible, a process that has been on hold nationwide for over two years now. Guidehouse’s Sterling Felsted shared his experience with unwinding redetermination holds in some states. He noted that the process is likely to take a long time to fully implement. Sterling projected that there could be up to a 30 percent difference in member months between states that quickly disenroll members versus a more drawn-out approach.

Regardless of the relative speed, the process will likely take long enough and disrupt overall acuity enough that mid-year capitation rate adjustments will be required. Sterling presented four different options, including (1) using concurrent risk scores, (2) conducting a durational analysis, (3) separating populations for analysis by “stayer/leaver/joiner” status, and (4) isolating “reverifieds” for analysis. He noted each of these approaches has both benefits and faults.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the newsletter editors, or the respective authors’ employers.

Marilyn McGaffin, ASA, MAAA is a Medicaid actuary for Pacific Source, located in Oregon. She is currently the co-chair of the SIPF section.

Stephanie Entzminger, FSA, MAAA is a consulting actuary for Axene Health Partners, based in San Diego. She is currently the Health Lead of the SIPF section.