Actuarial Soundness
MHPA Policy Statement on Actuarial Soundness
Federal law requires states to provide Medicaid health plans with prepaid payments that are actuarially sound, yet states use a variety of rate-setting methods that are often influenced by state budgetary factors. While the Secretary of HHS, through CMS, is required to certify that state rates are actuarially sound, enforcement of this requirement through the CMS regional offices has been inconsistent. Congress can ensure the federal-state partnership remains strong through enforcement of actuarially sound payment rates.
MHPA Fact Sheet on Actuarial Soundess and the Health Insuerer Fee
The Affordable Care Act levies an annual fee on health insurers of $8 billion starting in 2014, which increases over time. The fee applies to all health insurance risk revenue, including Medicaid and CHIP business. The cost of the annual insurer fee will be passed along to states and the federal government, raising costs in the program.
Educational Resources
GAO Report on Actuarial Soundness Released
Federal law requires states to provide Medicaid health plans with prepaid payments that are actuarially sound, yet states use a variety of rate-setting methods that are often influenced by state budgetary factors. While the Secretary of HHS, through CMS, is required to certify that state rates are actuarially sound, enforcement of this requirement through the CMS regional offices has been inconsistent. Congress can ensure the federal-state partnership remains strong through enforcement of actuarially sound payment rates.
MHPA Fact Sheet on Actuarial Soundess and the Health Insuerer Fee
The Affordable Care Act levies an annual fee on health insurers of $8 billion starting in 2014, which increases over time. The fee applies to all health insurance risk revenue, including Medicaid and CHIP business. The cost of the annual insurer fee will be passed along to states and the federal government, raising costs in the program.
Download MHPA's Fact Sheet on Actuarial Soundess and the Health Insurer Fee.
Educational Resources
GAO Report on Actuarial Soundness Released
August 4, 2010: The Government Accountability Office released a report on CMS's oversight of states' compliance with actuarial soundness requirements in Medicaid managed care rate-setting. Click hereto read the report on GAO's website. Click here to read MHPA's Press Statement.
Rate Setting and Actuarial Soundness in Medicaid Managed Care
January 2006: This study surveyed state Medicaid program to determine how states are implementing actuarial soundness requirements, in order to identify both best practices and continuing areas of concern. Click here to read the study.
2012 Annual Awards Forum
Register now for the MHPA Center for Best Practices Second Annual Awards Forum, April 30, 2012 from 8:00am to 2:00pm at the U.S. Chamber of Commerce in Washington, DC. This one-day event of industry CEOs, CFOs, CMOs and other key personnel will honor Medicaid health plans for their innovative and effective best practices which have improved the health of Medicaid enrollees. To register or become a sponsor, click here.
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