Is this the hardest job in America?
Actuaries are struggling to cope with Obamacare as health insurance guidelines change.
This post comes from Anna Wilde Mathews at partner site The Wall Street Journal.
Diane Seaman may have one of the toughest jobs in corporate America.
Ms. Seaman is the chief actuary for WellPoint Inc., the insurer which projects to enroll more than 600,000 in the new health care exchanges -- likely the most for any insurer. It's her job to develop rates for dozens of different offerings around the country. But for people who thrive on information, these can be harrowing times.
The health law has reshaped the way insurers do business. Before the law, consumers often had to tell insurers if they had health conditions that might require pricey care, such as diabetes. Insurers could typically boost those consumers' premiums or refuse to cover them. Now, insurers must accept all comers and they get no health information on enrollees.
That means that actuaries have little to go on when predicting medical costs -- and setting premiums. What's more, frequent regulatory tweaks from policy makers have forced actuaries to rejigger their projections and strategies on the fly. This is raising the stakes for actuaries, a word traced back to the Latin root for bookkeeper.
The rate-setting process under the law has been "very, very stressful," says Ms. Seaman. Late last year, after hearing on the radio about one rule change that effectively threw a wrench into years of work, the typically even-keeled 53-year-old found herself hitting the steering wheel during the commute to her Louisville, Ky., office. "I can't believe this!" she said. (Ms. Seaman says she was surprised by the announcement, not opposed to the policy.)
WellPoint Chief Executive Joseph R. Swedish says actuaries' work is "the critical ingredient in terms of how our business operates…. without actuarial analysis, we really are shooting in the dark."
Last year, actuaries and insurance executives had to make big bets on how things would play out for 2014, and some missed the mark. Based on actuarial projections from an outside firm, Houston-based Community Health Choice Inc. posted marketplace rates about 30% above its cheapest competitor. Regulators wouldn't allow the nonprofit to cut its prices, and it got far fewer sign-ups than it had projected.
"We all knew we were making our best educated guess, and we guessed wrong," says CEO Ken Janda. Community Health Choice is working with its actuaries and hoping to bring down next year's rates, he said.
Trying to interpret the regulations last year, "I longed for the specificity of an equation," says Janice Knight, chief actuary of Health Care Service Corp., parent of Blue Cross and Blue Shield plans in Texas, Illinois and other states.
Elaine Corrough, an actuary at consultancy Axene Health Partners in Murrieta, Calif. who sometimes speaks on behalf of the Society of Actuaries, says that to unwind, she turns to crocheting, which is "like doing spreadsheets, but with yarn."
She recalls finding a colleague at his desk one morning last spring wearing the same outfit as the day before. Ms. Corrough pulled her own office all-nighters last year. And one day last week, she was in the office until 10 p.m., and then arrived back at 4 a.m.
Many actuaries say this year's rate process won't be much easier than last time. They will still lack a clear picture of the likely health costs of their 2014 customers before they make their calls for 2015. Some enrollees signed up as late as this month. Even for those whose coverage started earlier, there is a months long lag time before companies process the claims that reveal what sort of health care their enrollees are getting.
Actuaries say the trend for premiums next year will vary by market and by company, and none shared details of their own companies' plans. But several pointed to things that will generally push rates higher, including the ratcheting-up of a health-law tax on insurers, and the shrinking sum available for the law's reinsurance protection. Insurers that believe enrollees are less healthy than originally projected will likely raise rates. The Congressional Budget Office has suggested exchange premiums will rise more slowly than previously expected.
Already, there is a politically charged spotlight on the profession. The American Academy of Actuaries even engaged in a bit of campaign-style rapid response after Republican National Committee Chairman Reince Priebus said in March that, in designing the health law, "actuaries sat down in a room and figured out how they were going to pay for this monstrosity of a program, and they decided let's just screw over everyone who's 35 or younger." The academy fired back that "the characterization of actuaries in those remarks cannot be taken seriously."
A spokeswoman for the Republican committee said Mr. Priebus "was making the point that Obama is forcing young people to pay more for Obamacare than they would on the free market."
Patrick Getzen, chief actuary at Blue Cross & Blue Shield of North Carolina, estimates that 80 percent of his time these days is spent talking to lawmakers, journalists and others outside the company about the law, rather than on typical actuarial work. "I do miss the math," he says. He's also constantly peppered with health-law questions from strangers and acquaintances. Three even buttonholed him at a neighborhood St. Patrick's Day party, with one man quizzing him on details of how the law counted part-time employees.
Before the health law, "people would look at me with a blank stare and have no idea what an actuary is," says Florida Blue Chief Actuary Doug Lynch. "Now you hear stuff about actuarial value on the news."
The profession's new prominence has at least one upside: a constant stream of job offers. Steven J. Gaspar, chief actuarial officer at Cambia Health Solutions Inc., the nonprofit parent of a major insurer, is so concerned about circling headhunters that he refuses to disclose how many people work under him. It's "the gold rush for health-care actuaries," he says.
For Ms. Seaman, a 25-year veteran of WellPoint and its predecessor companies who was a fine-arts major and a painter in college before getting her master's degree in mathematics, the marketplaces pose a particularly broad challenge. The insurer is participating in 14 of the consumer exchanges. "Sometimes it felt like my mind was on a gerbil wheel, and I just couldn't get off the gerbil wheel," says Ms. Seaman, who would clear her head on long drives with her husband.
She and her team worked weekends and over the holidays, and Ms. Seaman says she had to throw one actuary off a conference call when he phoned in during some time off she had pressed him to take.
As for her moment in the car, Ms. Seaman says the regulatory change surprised her. The regulators announced that insurers could allow people to keep health plans that had been expected to end in 2014. That posed a challenge for insurers such as WellPoint because, based on years of work, they were already moving ahead with new plans that were taking effect Jan. 1, along with ending some older coverage.
"How do you back all this out at the last minute?" she says she wondered.
On Wednesday, WellPoint said during a call to announce quarterly financial results that so far the demographics of its marketplace sign-ups were generally tracking its projections, and that it expected to earn profits on the business. Ms. Seaman, for her part, says, "it's not over till the fat lady sings; it's not over till we have the claims in."
More from The Wall Street Journal
1. 75% of the cost will be paid by households who make less than 100k a year.
2. The cap for subsidies is <~ 35,000/yr per person (rough ball park)
3. What will happen when they decide to let the employer mandate go live?
4. Not many young people signing up.
5. The penalties for not signing up are less than the healthcare itself.
6. More people got screwed with higher premiums or lost insurance all together because their existing policy did not meet the standard than people who actually needed healthcare. This also fluctuates depending on the state you live in.
7. Why was Congress and their staffs able to get out of it? If it is good for us it should be good for them.
8. This administration generates more revenue than the previous, but still spends at a deficit. and has not passed a budget in 5 years, and still rams through a $2 trillion program.
90% of this program is a disaster, and 100% of it is a "Lie"! "Period"!
Nuff said for Democrats!
I can almost guarantee that any decent person dem or rep will say we need affordable healthcare for all. The difference is that Reps will say but not at the expense of the American Economy.
If Democrats are supposed to be the good guys then how come corporations are seeing record profits under Obama but yet Unemployment is still high and wages have stagnated. Before people say well the reps have the house...well they didn't for the first 2 years.
So let me get this right. Hardest job in America is walking a "fine line" between charging your clients the most you can get and still underbid your competitors and haggling the cheapest price from the doctors and still keep them? is that the reason why the health insurance industry in general has been making huge profit gains year over year? I'm sure it's "HARD" to do both with such a HUGE gap between those price margins.
Oh, please. Hardest job in America?
No wonder why we look like such fools to the rest of the world. People just don't know the meaning of what 'work' is anymore.
33% of those who signed up for Obamacare didn't pay! And only 25% were young and healthy.
The next statistic to be released will be how many of those who signed up were forced to do so because their policies were cancelled under Obamacare's new guidelines.
When the dust settles on this tragedy, the Obama administration will have destroyed 1/6th of the US economy in order to ensure roughly three million "uninsured" people.
Well done, liberal Democrats! Well done!
Jay Carney has the hardest job in America, repeatedly lying for the Obama administration.
Granted, having no morals or inhibitions about lying makes it easier for him to do his job, but he must feel like Susan Rice every time he gets up to speak.
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