The Center for Consumer Information & Insurance Oversight (CCIIO) has posted a mathematical tool that could reshape the U.S. health insurance market.
The CCIIO has released a proposed version of an actuarial value calculator that health insurers, regulators, brokers and others could use to measure how much actuarial value (AV) a health insurance plan provides.
The Patient Protection and Affordable Care Act of 2010 (PPACA) calls for health insurance market players to use actuarial value and calculations based on actuarial value to determine whether plans provide right amount of coverage to fit in the platinum, gold, silver or bronze "metal levels." The calculator cannot help a user determine whether a plan provides the minimum required level of coverage value.
The calculator, which is formatted as a spreadsheet, includes boxes for indicating whether, for example, a plan uses an integrated medical and drug deductible, whether the plan applies a daily skilled nursing facility co-payment requirement, and whether a plan imposes a deductible on enrollees who are seeking imaging services or rehabilitative speech therapy in network.
The calculator comes with "continuance tables" or a collection of the population claims data tables used to create the calculator.
The CCIIO published the calculator and the continuance tables on its website last week.
"The AV calculator will be available for both formal and informal calculations and could be used as a tool to assist in the design of health plans," according to officials at the CCIIO's parent, the U.S. Department of Health and Human Services (HHS). "The calculator will allow health plan issuers to devise a compliant plan without the burden of making the assumptions needed or paying for the analysis for an AV calculation."
PPACA PPACA opponents are still looking for ways to kill PPACA or block implementation of the law. If the law takes effect on schedule and works as drafters have predicted, the law will give individuals and small groups the ability to use new federal tax subsidies to buy prescreened coverage through "health insurance exchanges," or Web-based health insurance supermarkets, starting in late 2013, with the coverage to take effect Jan. 1, 2014.
PPACA would require many individuals to own a minimum level of coverage or else pay a penalty, and it would require most employers with at least 50 full-time equivalent employees to provide coverage or else pay a "shared responsibility" penalty.
