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Medicare Blog | Medicare News | Medicare Information

Impact of Healthcare Reform on the Medicare Market

Posted by Guadalupe Cantu on Fri, Sep 06, 2013 @ 11:15 AM

Medicare SupplementsAs the Affordability and Accountability Act inches closer to the October 1st launch date, many insurers are anticipating major changes in the regulatory and funding under the new health care reform law. With all this anticipation going around, how will the Medicare Supplement and Medicare Advantage programs be affected by the changes?

For Medicare Supplement program, health care is hardly unaffected by the ACA. Under the new changes (Section 3210 of ACA), the National Association of Insurance Commissioners (NAIC) was required to add a minimal cost to the C and F plans. In December 2012, in a letter to Health and Human Services Director Kathleen Sebelius, the NAIC recommended a no cost sharing to the plans, stressing that that the additional cost would decrease usage. In May 28, 2013, the no cost sharing to plans C and F was accepted in a letter response by HHS Director Kathleen Sebelius.

The Medicare Advantage program has been affected the most by the changes. The ACA holds the Med Advantage program to an 85% minimum loss ratio. It further requires the funding levels to the plans to be restructured, removing 14% overpayment to Medicare Advantage, aligning it closer to the traditional Medicare program. This in spite of the 2012 demonstration program by Centers for Medicare & Medicaid Services, which expended payments to the Medicare Advantage program and regulates the funding and cuts of program.

With the regulations that the ACA has put in place for the health care reform, it has had a two-pronged road affect. The traditional plan seems to have gone unscathed, while the Med Advantage has an uphill battle adjusting it rates to the market, as well as, and being a hot topic for future political health battle grounds to come.


Please give us your feedback!
Does the health care reform hurt the Medicare insurance industry or will it make it more competitive and affordable?

 

Source: CSG Actuarial

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