BCVT-128609558

RATE FILING SUMMARY

BCBSVT’s 1st and 2nd Quarter of 2013 Trend Filing.

Company is proposing base annual trend factors of 6.0% for medical claims, 6.0% for pharmacy claims and 6.0% for combined medical and pharmacy claims.

First-Second Quarter 2013 BCBSVT Trend Filing

• Blue Cross Blue Shield of Vermont (BCBSVT) is a Vermont company that exists to
provide health benefits and financing to Vermonters.

• BCBSVT is proposing allowed, capped (at $100,000 per member) trends of 6
percent for medical and 6 percent for drug.

• These trends are converted to an uncapped, benefit paid trend basis (Exhibit IV
of the filing), which, along with the Benefit Leveraging Factors in that Exhibit,
will be used in rating BCBSVT products with effective dates during the first and
second quarters of 2013.

The proposed trends are developed from statistical analyses of claims incurred by
BCBSVT members during the period of December 2007 through April 2012, using the
following steps:

• Allowed charges (i.e. total claim amount before cost sharing) are used to
eliminate the effect of benefit changes.

• Charge amounts in excess of $100,000 for any member for any 12 month period
are removed to minimize distortion from unusually large claims.

• Projected trends for capped allowed charges are then set.

• Projected trends for uncapped allowed charges are calculated from the capped
allowed charge trends, using insurance industry data.

• Benefit leveraged trends are then developed, and are based on the following
characteristics of benefit plans: product type (medical, drug, or combined, e.g.
Consumer Driven Health Plans, CDHP’s), deductible or copay level, coinsurance,
and pooling point (for groups with Stop Loss coverage).

Both medical and drug claims have markedly increased in recent months, leading to
projected capped allowed charge trends of 6 percent for both medical and drug.

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Once the actuarial opinion has been received by the Department and the Commissioner’s recommendation concerning this filing has been made, these documents will be found at the Green Mountain Care Board’s rate review website: http://gmcboard.vermont.gov/rate_review.    You can search the Board’s website using the SERFF tracking number at the top of this page.  Once the decision has been issued by the Board we will update the status of the filing on our website.  Please note there is a time lapse between when the filing is submitted to our Department and when the Board issues the decision.