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November 14, 2014

Math, uncertainty and the Supreme Court: Nashville experts reflect on ACA’s first year

Math, uncertainty and the Supreme Court: Nashville experts reflect on ACA’s first year
by Eleanor Kennedy | Nashville Business Journal | Nov 12, 2014


A Nashville Health Care Council panel on the Affordable Care Act’s first year in action
Wednesday afternoon included lengthy discussion of both math and Obamacare’s all-time top buzzword: uncertainty.

Panelist Jim Srite, senior vice president and chief actuary for BlueCross BlueShield of Tennessee, the state’s dominant insurer on the public exchange, was the primary proponent of the math issue, as he discussed the difficulties of predicting what rates to set and who might enroll, not only in the exchange’s first year but also nearly every year after.

While BCBS was happy to enroll 88 percent of Tennesseans who selected marketplace plans, Srite said, the insurer’s first-year experience also came with a downside. Many of those enrollees were older and at higher risk than the insurer had projected, contributing to the company’s sizable loss during ACA year one and its decision to raise rates for round two.

Not only that, he added, he’ll be working to set 2016 rates in June of 2015, despite the fact that full 2014 results won’t be available until August.

Srite’s comments prompted moderator Reed Tuckson, former executive vice president and chief of medical affairs for United HealthGroup, to note that while there’s been much discussion of the philosophical and political pros and cons of Obamacare, not as much attention has been paid to the folks like Srite who are trying to make it work in practice.

“At the end of the day,” Reed said, “the math has got to work.”

But those philosophical and political issues also contribute to another major theme of Wednesday’s panel: the continuing uncertainty related to the act’s implementation. Not only are insurers like BlueCross continuing to struggle to determine how to price plans, two major political events last week could have big impacts on what Obamacare looks like in the future.

Reed called the Supreme Court’s decision to hear King vs. Burwell, a case challenging the legality of subsidies on the federal exchange, and last week’s big Republican election wins the “elephants in the room” when it comes to Obamacare discussions.

Chip Kahn, president and CEO of the Federation of American Hospitals, said the court’s consideration of the case will create a lot more of that dreaded uncertainty between now and when the decision comes out next summer.

Still, Kahn and most of the other panelists seemed confident that even if the court rules against subsidies, the government will find a way to work around the blow and keep the act functioning as intended.

As for Srite and his fellow actuaries, the Supreme Court decision is not playing a role in his attempt to make that math work.

“It’s either going to survive or be worked around,” Srite said of the law’s subsidies. And if not, he added, that will change everything, so worrying about it now wouldn’t do much of anything.

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