It’s tempting to draw parallels between PPACA and Medicare.
But the Patient Protection and Affordable Care Act exchange system will probably be bigger, more complicated and less flexible than the Medicare Advantage Part D prescription drug program.
Despite that, other similarities suggest carriers still would be able to create successful plans for them. Hans Leida, a consulting actuary at Milliman, makes that case in a new commentary.
He focused on just the individual exchange market, but its performance could affect how easily employers can replace traditional group health plans with “defined contribution” plans that offer employees cash they can use to then buy their own individual coverage.
Leida noted in the paper that, back in the early 1990s, an actuarial task force suggested one of the primary drivers of market risk was barriers to raising inadequate rates quickly.
Regulators have placed several restrictions on Medicare drug plans, including rules requiring carriers to file drug plan rates far in advance, Leida wrote.