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The largest portion of healthcare reform Affordability and Accountability Act "ACA" is set to go into effect in 2014. For the most part the Medicare Supplement market will be largely unaffected by ACA with most of the impact resulting indirectly from changes to Medicare Advantage.

Possible impact to Medicare Supplements:

Medicare Supplement::

• Section 3210 of ACA required the NAIC to add a nominal cost sharing to plans C and F (however, the NAIC has recommended no cost sharing to plans C and F due to lack of evidence this would decrease utilization. This has not been decided upon.)
• Mostly unaffected by ACA, as long as Plan F doesn't change

• Medicare Advantage plans will be held to a minimum loss ratio of 85%
• Restructures the funding levels to Medicare Advantage plans in order to reduce the payments closer to traditional Medicare
• CBO estimates this will cut approximately $145 billion over the next 10 years
• The payment restructuring was designed to be implemented over 3-6 years, which began in 2011

The changes to ACA may even prove positive for the Medicare Supplement market. Medicare Supplements will not be affected by minimum loss ratio changes or any major plan changes, whereas the Medicare Advantage market will most likely have a higher minimum loss radio requirement and continued political pressure on funding.

If there are any Medicare Supplement carriers you’d like to add to your portfolio, give your marketer a call at 1-800-998-7715; they can assist you with more information on all of the carriers PSM offers.

Source: CSG Actuarial