HEA 2015 Transfer Payment Report Analysis - Siegel
1. 2015 Transfer Payment Report Analysis
The Risk Adjustment Forum & The RADV Master Class
November 11, 2016
Jason Siegel, FSA, MAAA
Senior Consulting Actuary
2. 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
3. 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
4. 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%
9. Drivers of Special Enrollment Period Experience
9
• Indicates member need
• May only collect a couple months’ premium
• Short period of time to identify HCCs
• Minimal impact from cost sharing
11. Some Drivers of plan selection
Unhealthy
Unsubsidized Subsidized
Healthy
Premium +
OOP
Brand
recognition
Network
size
Premium
vs Penalty
Prior
selection
Brand
recognition
12. Net Income by Metal
12
Net Income by Metal (1R)
Metal
Net 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)
14. Drivers of Platinum Results
14
• 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
15. Drivers of Silver Results
15
• Selection
• Broad risk mix given CSRs
• Risk Adjustment
• Induced utilization adjustment creates cash inflow
• Pricing
• Cost sharing influences low income behavior more
16. Drivers of Catastrophic Plan Results
16
• 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
17. Strategies for Competing on the Exchange
17
• 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
18. Identify Profitable Segmentation Pathways
18
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
