Controlling Indirect Selection under Healthcare Reform - Society of ...

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108 Figure 36 Regulatory Options Selection Control or Mitigation Option 6 Post-Enrollment Alternative To A Annual plan changes -- B Maximum one tier change -- C Disenrollment rates as a quality measure -- D Disenrollment rate penalties 6EF E Disenrollment per head penalty 6DF F Disenrollment reinsurance 6DE 6A: Annual plan changes. Just like an insured should be able to enroll once a year, he or she should be able to change coverage only one a year, ideally with the window for making the change ending a couple of months before the new plan year begins. This is also standard in the group health insurance market. 6B: Maximum one tier change. In order to encourage everyone to buy the insurance that they need over the long term and not just at the moment, insureds should not be able to upgrade their coverage more than one mineral-level per enrollment cycle. 6C: Disenrollment rates as a quality measure. Because insurers may skimp and dump, it is important to closely watch disenrollment rates, particularly for the most expensive or other vulnerable insureds. 6D: Disenrollment rate penalties. Simply being watched may not be enough reason for insurers to avoid skimping and dumping. 6D, 6E, and 6F impose direct financial costs. One option is that an insurer could be penalized if more than a certain percentage of insureds, or more than a certain percentage of vulnerable insureds, move to another insured.
109 6E: Disenrollment per head penalty. Alternatively insurers could have to pay a flat penalty (tax) to either the government or to the insurer receiving the insured for every insured that moves. 6F: Disenrollment reinsurance. Another alternative is to have the prior insurer reinsure the new insurer for insureds who leave. For example, the prior insurers could have to reimburse the new insurer for 50% of the claim costs for the insured for the first 6 months after the insured moves. 7. Care Management Care management is a very difficult arena for the government, whether federal or state, to regulate. Consumers fear government “death panels”. Unnecessary care frequently meets consumer emotional needs, if not physical ones. Unproven care from the scientific perspective may be a healthcare consumer’s only hope for quality of life, or even life itself. Yet, healthcare costs will not be controlled if we don’t, as a society, do a better job of managing and limiting care. PPACA has given insurers and the providers who work with them the task of figuring out how to do this. The problem is that they might overstep and perform the task too well, thereby limiting necessary and proven care and encouraging expensive insureds to go elsewhere. Yet, given the lack of general consensus regarding necessary and proven care, it will be impossible to “prove” that an insured or provider has overstepped. The following regulatory options should help:
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Controlling Indirect Selection unde
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iv ACKNOWLEDGEMENTS I am thankful f
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vi C. Regulatory Timing ...........
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viii 22. Profit = .................
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x MEPS P&C PBM PHI PPACA RA SES SOA
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I. INTRODUCTION Consultants from th
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3 This paper is meant to be a prime
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5 1970; Rothschild & Stiglitz, 1976
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7 the right side of the bar. With r
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9 limits choice for other high risk
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11 2. Process. Direct selection is
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13 just a department. This expansiv
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15 F. Consumers Demand Change Direc
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17 2. Risk adjustment (PPACA, Secti
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19 consumer selection. This section
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21 Whether the adjustment occurs vi
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23 risk. 43 Today’s risk adjustme
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25 Figure 8 Other Predictive Variab
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27 Genetics are also important. A d
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29 generally socially and economica
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31 of costs and very few have $50,0
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33 have no recent diagnoses or pres
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35 Unidentified Sick are unidentifi
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37 Figure 15 Demonstration: Financi
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39 The benefits of indirect selecti
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41 get insurance or gets it on less
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43 Assuming that at least some insu
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III. INDIRECT SELECTION UNDER HEALT
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47 insurers should use a Lifestyle
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49 Figure 19 Neighborhood-Level Dat
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51 This list of data elements align
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53 Consumer marketing databases pro
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55 Figure 23 New Business Predictiv
Page 67 and 68: 57 diabetics while finding ways to
Page 69 and 70: 59 risk insureds, “skimping” wi
Page 71 and 72: 61 Figure 28 The model is consisten
Page 73 and 74: 63 Insurers will rely upon predicti
Page 75 and 76: 65 that they are related to the cha
Page 77 and 78: 67 profitable and the second neighb
Page 79 and 80: 69 relevant to insurers with a larg
Page 81 and 82: IV. PUBLIC POLICY CHALLENGES Indire
Page 83 and 84: 73 will never be a clear line betwe
Page 85 and 86: 75 healthcare cost variance outside
Page 87 and 88: 77 to educate poor children. Althou
Page 89 and 90: 79 Figure 30 Dynamic System: The ke
Page 91 and 92: 81 regulators. If regulators don’
Page 93 and 94: 83 regulatory front, while struggli
Page 95 and 96: 85 in Chapter 3. The discussion wil
Page 97 and 98: 87 1A: Include family income in ris
Page 99 and 100: 89 example, assigning a risk premiu
Page 101 and 102: 91 2. Market Entry Regulators desig
Page 103 and 104: 93 2A: Individual insurance only fr
Page 105 and 106: 95 “restricting choices”. It is
Page 107 and 108: 97 adverse consumer selection. Whil
Page 109 and 110: 99 3B: Fixed benefit designs. It is
Page 111 and 112: 101 There is general consensus in t
Page 113 and 114: 103 4D: Agent restrictions. At a mi
Page 115 and 116: 105 Figure 35 Regulatory Options 5
Page 117: 107 6. Post-Enrollment Consumer sel
Page 121 and 122: 111 While insurers cannot directly
Page 123 and 124: 113 the insureds who have a diagnos
Page 125 and 126: 115 E. Monitoring If regulations ar
Page 127 and 128: 117 enrollment and disenrollment ra
Page 129 and 130: 119 publicly discussed. Discussing
Page 131 and 132: 121 Such a strategy is dependent up
Page 133 and 134: REFERENCES AAA. (2009). Issue Brief
Page 135 and 136: 125 Byrne, S. K. (2008). Healthcare
Page 137 and 138: 127 Gallo, L. C., Penedo, F. J., Ex
Page 139 and 140: 129 Lewin Group. (2010). Individual
Page 141 and 142: 131 Riley, T. (2010). Reform has a
Page 143 and 144: 133 van Barneveld, E., van Vliet, R
Page 145 and 146: APPENDIX Health Insurance Risk Adju
Page 147 and 148: Appendix 137 ABSTRACT The U.S. Pati
Page 149 and 150: Appendix 139 BACKGROUND As expresse
Page 151 and 152: Appendix 141 not eligible for subsi
Page 153 and 154: Appendix 143 Starting in 2011 insur
Page 155 and 156: Appendix 145 1) Current conditions
Page 157 and 158: Appendix 147 First consider the lin
Page 159 and 160: Appendix 149 counter this argument.
Page 161 and 162: Appendix 151 Current Risk Adjustmen
Page 163 and 164: Appendix 153 Model 4 fits the risk
Page 165 and 166: Appendix 155 An examination of the
Page 167 and 168: Appendix 157 ANALYSIS Data Descript
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Appendix 159 Specifically, the anal
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Appendix 161 Equation 1 Proxy Expen
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Appendix 163 Expenditures have been
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Appendix 165 Equation 3 Normalized
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Appendix 167 The technical difficul
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Appendix 169 prediction residuals?
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Appendix 171 The lower income and h
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Appendix 173 RESULTS The results ar
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Appendix 175 Figure 12 Income Effec
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Appendix 177 LIMITATIONS The analys
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Appendix 179 Likewise, due to healt
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Appendix 181 DISCUSSION Even with t
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Appendix 183 Much of Jost’s timel
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Appendix 185 RECOMMENDATIONS Based
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Appendix 187 TABLES
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Appendix 189
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Appendix 191
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Appendix 193 REFERENCES AAA. (2010)
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Appendix 195 Diez Roux, A. A. (2001
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Appendix 197 McKinsey & Company. (2
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Appendix 199 WHO. (2005). Facing th
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TIA GOSS SAWHNEY Vita 201 Directo
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TIA GOSS SAWHNEY Vita 203 “Busine
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