Wednesday, April 24, 2013

Bullying Health Insurance Actuaries

Years ago, the Disease Management Care Blog proudly showed the consulting health insurance actuaries published data like these and these. It naively expected the actuaries to agree that disease management had resulted in cost reductions and that the programs should be favorably factored into the managed care insurance plan's premium pricing for the coming year.

The response of the actuaries was "no."

Disease management not only did not factor into their trend analysis, they decreed that the programs' costs needed to be loaded as an additional administrative cost. The worst part of dealing with their obstreperous math was that the health insurance plan was actually paying them to deliver this bad news.

Which is why the DMCB believes that anyone who believes that actuaries' relationships with health insurers are riddled with conflicts of interest is amateurishly misinformed.  To wit, Senator Franken (D-MN) recently scored a political "gotcha"against the Society of Actuaries when they had the temerity to predict that health insurance costs in the individual market could go up by 32%. While it is true that their consulting services generate fees that are paid by their insurers, their hard-nosed recommendations are hardly ever welcome in the industry, their fees are not linked to health plan profitability, states have regulated actuarial consulting input for decades and, to add insult to injury, customers like the DMCB have to pay their fees for unwanted news.

At one level, the DMCB welcomes members of the U.S. Congress to its world.  The job of the independent actuaries is to present inconvenient truths about future health care trends and premium pricing.  At another level, the DMCB is concerned that Frankenesque-style bluster and bullying could force health insurance actuaries to underprice insurance and destabilize the market just when Obamacare is getting out of the blocks.  We deserve better.

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