The Self-Insurance Subgroup is looking into arguments that dramatic expansion in the self-insurance market could destabilize the group health market starting in 2014.
The group, part of the Health Care Reform Actuarial Working Group at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., gave the working group’s parent, the Health Actuarial Task Force, an update on its work at the NAIC’s recent spring meeting in New Orleans.
If insurers make stop-loss programs too attractive to very small employers, then the healthiest small groups may decide to self-insure, subgroup members say in a summary of their work prepared for the task force.
If that prediction comes true, “sicker groups would obtain coverage through the exchanges, which may create selection against the exchanges that results in increases in exchange premiums,” the subgroup members say.
PPACA AND THE STOP-LOSS MARKET
The Patient Protection and Affordable Care Act of 2010 (PPACA) is supposed to create a new system of health insurance exchange — Web-based health insurance supermarkets — starting in 2014.
If PPACA takes effect on schedule and works as expected, individuals and small groups will be able to use new tax subsidies to buy health coverage that meets exchange quality standards.
Actuaries, insurance company executives and others have suggested that differences between the rules and practices in different sectors of the health insurance market could lead to “antiselection,” or the risk that the healthiest individuals and groups will flock to some types of plans and leave other types of plans saddled with the individuals and groups that generate the most claims.