hea 2015 transfer payment report analysis - siegel
TRANSCRIPT
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2015 Transfer Payment Report Analysis
The Risk Adjustment Forum & The RADV Master Class
November 11, 2016
Jason Siegel, FSA, MAAA
Senior Consulting Actuary
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Agenda
• Experience by HCC / age / enrollment period
• Deep dive into metal selection & how it drives results
• Strategies for competing on the exchanges and
changes going forward
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Agenda
• Experience by HCC / age / enrollment period
• Deep dive into metal selection & how it drives results
• Strategies for competing on the exchanges
• What we can expect now that Hillary Clinton has
been elected president*
* I created these slides on Monday
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Sick vs Healthy
Net Income
PMPM - 1R
%
Enrollment
Members with at least one HCC $116.80 21%
Members without any HCCs ($65.65) 79%
Total ($27.34) 100%
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Profitability by # of HCCs
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-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Pro
fit
Mar
gin
Enrollment Month
2014 ACA Experience by Enrollment Month
Open Enrollment
Special Enrollment
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Drivers of Special Enrollment Period Experience
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• Indicates member need
• May only collect a couple months’ premium
• Short period of time to identify HCCs
• Minimal impact from cost sharing
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Partial Year Enrollment Distribution
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Market Shifts
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Some Drivers of plan selection
Unhealthy
Unsubsidized Subsidized
Healthy
Premium + OOP
Brand recognition
Network size
Premium vs Penalty
Prior selection
Brand recognition
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Net Income by Metal
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Net Income by Metal (1R)
MetalNet Income PMPM
(1R)
Net Income PMPM
(2R)
Catastrophic $49.08 61.78
Bronze ($39.52) $6.36
Silver $5.16 $56.69
Gold ($115.95) ($14.81)
Platinum ($235.51) ($89.23)
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Drivers of Platinum Results
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• Selection• One-time events
• Hep C drugs
• Special enrollment periods
• Risk Adjustment• Lack of granularity
• Under-coding
• Pricing• High induced demand
• Actual vs theoretical AV
• Contracting• Facility contracts hitting outlier threshold
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Drivers of Silver Results
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• Selection• Broad risk mix given CSRs
• Risk Adjustment• Induced utilization adjustment creates cash inflow
• Pricing• Cost sharing influences low income behavior more
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Drivers of Catastrophic Plan Results
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• Selection• Strong positive selection
• Risk Adjustment• Separate risk pool so no cash outflows
• Leveraging of members with any conditions
• Pricing• Does not reflect extreme healthiness of this group
• Compounded with AV impacts
• Not a competitive market
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Strategies for Competing on the Exchange
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• Get granular enough in data analysis to see what’s working and what’s not
• Offer competitive Silver and Catastrophic plans
• Drop plans before the September deadline
• Offer value based plans
• Leverage Formulary Design
• Manage the Special Enrollment Period
• Account for market exits when setting rates
• Persist older members into MA block
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Identify Profitable Segmentation Pathways
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Reality: 100 clinical categories, 5 metal tiers, 10 rating areas,
20 HIOS plan IDs, 25 demographic categories, 5 provider networks
Would create13 million data slices
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Risk Adjustment Model Changes
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2015• No Model Change; ICD10 Introduced
2016• Updated Data; Multiple Years
2017• Preventive Benefits; Updated Data; Rx Trends;
Partial year
2018• Rx modeling; High cost pooling; ACA data;
Premium vs claim basis; Post-year coefficients
2020• Socioeconomic / Sociodemographic variables