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Is this the hardest job in America?

Actuaries are struggling to cope with Obamacare as health insurance guidelines change.

By Money Staff May 1, 2014 12:31PM

This post comes from Anna Wilde Mathews at partner site The Wall Street Journal.

The Wall Street Journal on MSN MoneyDiane 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.

 Insurance Policy © Don Carstens/Brand X Pictures/JupiterimagesThe 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

May 1, 2014 2:09PM
Hardest job in America? Give me a break, try working in the coal mines, or being shot at for a living like our cops or military.
May 1, 2014 2:39PM
The problems with ACA

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.

May 1, 2014 1:59PM
Leave it to the government to make things for the little guy more expensive and more difficult.
May 1, 2014 1:40PM

90% of this program is a disaster, and 100% of it is a "Lie"! "Period"!

Nuff said for Democrats!

May 1, 2014 12:55PM
This is a total liberal disaster. we will all perish from within.
May 1, 2014 2:58PM
@Kevin...the gift to the Insurance Companies came from President Obama.  HE is the one that allowed them to help write the ACA.

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.

May 1, 2014 2:38PM

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.

May 1, 2014 4:54PM

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.

May 1, 2014 3:52PM
hardest job in america? are you kidding
May 1, 2014 5:10PM
The dummying down of America continues at full speed.  The question is;  how long will Americans actually work for a living and support those that do not?
May 1, 2014 3:29PM
Insurance is the biggest rip-off scam going in America today.  That's why crooked politicians like O'Bama are so deeply involved.  What other private enterprise benefits from a mandatory participation?  You HAVE to have insurance because it is legislatively required.

If you have insurance, you HAVE to pay premiums.  If you have a legitimate claim, there is no guarantee that the insurance company will pay.  Insurance companies are so reluctant to fulfill their obligations that they frequently must be sued to simply collect what is owed.

Any time an insurance company has to pay for a claim, premiums are raised, but coverage remains questionable.

Hardest job?  Well, the hardest job is most definitely NOT something involved with insurance - or journalism, either for that matter.  The insurance business is the closest thing to legalized theft that one can enter.

Telling dishonest lies about crooks seems to be the bread and butter of journalism.  If it were not for the favorable spin journalists place on real world conditions, every insurance related occupation would carry a de facto death sentence from the outraged participants who are forced to cooperate in this egregious scam.
May 1, 2014 4:16PM
First you pass the bill then you read it. Throwing that person out on the street unemployed must be a hard job. She is still there getting paid by  tax payers who she represents in her best interest.
May 1, 2014 6:23PM

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!

May 1, 2014 4:26PM
They be calling that the hardest job in the Americas? Really have these people ever tried being married? That is some hard stuff, gotta listen to the naggin and the complain and the whinnin.  Tarry stop drinkin, Tarry do really need a beer with breakfast? Tarry take out the trash, tarry the dogs crapped in the livin room again. I would take the job of sortin threw Idiotcares stuff then listen to this all day. That is if my dang trick knee would let me work.
May 1, 2014 7:12PM

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. 

May 2, 2014 7:58AM
The hardest job in America is being President. Keeping all those lies straight must be exhausting.
May 1, 2014 2:22PM
Error on the side of caution and just set premiums higher so you don't get into a big hole when all these unhealthy people start making claims.  Don't expect the government will bail you out as well. 
May 1, 2014 5:26PM
The insurance companies are guaranteed their profit margins by Obama and his dimwitted cronies. Ms. Seaman could get rate predictions from a 12 year old, scribble the number, in crayon, on the back of a napkin, and the insurance company is still going to make money hand over fist off of obamacare. Unfortunately it will be all of the government subsidy payments made with our tax dollars that will make up most of that money.
May 2, 2014 12:19PM
The hardest job in America?

A Viagra tester.

May 2, 2014 9:02AM
is that her real hair? scary looking me thinks....
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