Taking The Actuarial Challenge

Everyone has an opinion on health insurance – what is and isn’t working, what should change and why. So why not get some opinions from people who spend their careers analyzing risk? I’m talking about actuaries.

The Robert Wood Johnson Foundation, Milliman and the American Academy of Actuaries are teaming up to conduct the “Actuarial Challenge.” The idea is to gather ideas that would move the individual insurance market further toward the goal of universal access to quality care in a financially secure and stable way.

The challenge began in September and will conclude in March.

Sounds like a tall order!

Actuaries were invited to take to Twitter recently for a Twitter chat and throw out some suggestions on how to improve the stability of the health insurance market.

Many of the participants said higher retention rates are key to giving insurers more incentive to offer plans. Participants said insurers should provide financial incentives to consumers to remain on their plans, such as a rebate or other financial incentive for those who remain on their plan for more than two years.

Getting a consistent risk pool and understanding that pool’s characteristics will be a key aspect of stability in the health insurance marketplace, one participant offered. Merging small and individual markets was another suggestion.

The question on whether children should be able to remain on their parents’ health plans until age 26 also was debated. At least one participant thought that provision of the Affordable Care Act should be abolished, while another argued that part of law was probably its most popular feature. Still another participant favored the ability to carry over deductibles for 26-year-olds on their parents’ plan who age out mid-year.

Some participants suggested pooling the entire individual market and managing it on a nationwide basis instead of on a state-by-state basis, pointing out for example that a state the size of Minnesota would never have the individual pool the size of that in California or New York.

One actuary probably summed it up best: “Feels like there needs to be a new model - insurers trying to price market with old tools and no underwriting.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com.

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