GAO Issues Report on Affordable Care Act
The report was sent to Sen.
What GAO Found: "The Patient Protection and Affordable Care Act (PPACA) included a revenue provision for a 40 percent excise tax on high-cost employer-sponsored health coverage to be administered by the
The BCBS Standard plan has benefits and limitations for use as the basis of the adjustment. The benefits include that it is a large, national, decades-old, convenient data source, in that it is already known by, and available to, the federal government. However, there are some specific limitations to its use.
The BCBS Standard plan has selection bias within FEHBP because members have a choice among many plans, and, compared to other options available to federal employees, it is a relatively expensive plan that covers members with higher health care costs. GAO's analysis of OPM data found that these higher costs are particularly true for younger members.
The plan's enrollment has declined in recent years. Furthermore, officials noted that any one plan offering could be discontinued.
The selection bias in the BCBS Standard plan may result in an age and gender adjustment that is not adequate. For example, because the BCBS Standard plan covers young members with higher health care costs, the ratio between the average claims costs of the younger and older members in that plan is smaller than it would be in a plan that did not have that particular selection bias issue. Therefore, the age and gender adjustment could be too small. While experts GAO spoke with identified several potential alternative sources of cost data for use as the basis of the adjustment, those alternatives also had limitations, such as not being convenient sources of data and potentially not being representative of the national workforce.
To mitigate limitations of the BCBS Standard plan, these data could be supplemented with data from other FEHBP plans, such as the BCBS Basic plan, which is known to have younger members with lower health care costs and increasing enrollment. GAO found that using combined data from these two sources could result in a different adjustment for some employers--in particular, for those with older employees. Standards for internal control suggest that effective information is vital for an entity to achieve its objectives. Relying on BCBS Standard plan data alone does not provide
Why GAO Did This Study: "Some stakeholder groups have questioned the use of the BCBS FEHBP Standard plan premium costs as the basis of the age and gender adjustment, as stipulated by PPACA. The Consolidated Appropriations Act, 2016 includes a provision for GAO to report on the suitability of using these data for this purpose.
This report examines: 1) the benefits and limitations of using FEHBP BCBS Standard plan data as the basis of the age and gender adjustment, and what alternatives to these data could be considered; and 2) how any limitations to BCBS Standard plan data could be mitigated. GAO reviewed
What GAO Recommends: "GAO recommends that, in implementing the age and gender adjustment,
The text of the GAO report is available at http://www.gao.gov/products/GAO-17-661?utm_medium=email&utm_source=govdelivery


Sen. Alexander Issues Speech on Health Insurance
Texas Mutual Insurance Company Deploys Guidewire Core and Data Products
Advisor News
- The 6X Formula for leveraging content marketing with AI
- When a home becomes difficult to insure, the plan changes
- The inheritance gap: Helping clients plan for money that hasn’t arrived
- After the midterms: Addressing your clients’ tax concerns
- Berkeley arts tax heads toward passage while public bank measure looks likely to fail
More Advisor NewsAnnuity News
- FHLBank Pittsburgh Announces Results in 2026 Board Election
- Regulators advance shorter, streamlined annuity buyers guide
- Annuity sales hit record $126.3B as RILA sales top $25B
- More pre-retirees rethink retirement as income-planning concerns grow
- AM Best Affirms Credit Ratings of Knighthead Annuity & Life Assurance Company and Merit Life Insurance Co.
More Annuity NewsHealth/Employee Benefits News
- Reports from Maud Hofland et al Highlight Recent Findings in Science (Responses to cost-sharing: do socio-demographic characteristics matter?): Science
- New Findings from University of Michigan Yields New Data on Managed Care (Hybrid human-digital motivational incentive intervention protocol for smoking cessation among perinatal Medicaid patients): Managed Care
- Studies from University Health Network Yield New Information about Cervical Cancer (Uterine Cervical Cancer Treatment and Outcomes Among Medicare-Insured Patients in the United States): Oncology – Cervical Cancer
- CVS breakup to separate pharmacies from insurance
CVS to break up $117 billion business, separating pharmacies from insurance; shares fall
- Va. offers new path to plans
New Va. subsidies help lure people back to health insurance
More Health/Employee Benefits NewsLife Insurance News
- Security Benefit Series B Preferred Stock Dividend Rate Resets to 10.286%
- FHLBank Pittsburgh Announces Results in 2026 Board Election
- New Jackson Study Finds the "Sandwich Generation" Squeeze Comes from More Than Two Sides and It’s Quietly Draining Retirement Savings
- Samsung Fire & Marine Insurance to Acquire Outstanding Stake in Canopius with KKR and KIC
- Start estate planning before the family needs it
More Life Insurance News