BCVT-128778918

RATE FILING SUMMARY

BCBSVT’s First through Third Quarter Small Rate Filing.
Proposed Change:

• i. The company had been proposing an overall average annual rate increase of 8.3% (above 1Q2012 rates) for policyholders renewing in 1Q2013.  Following the company’s amendment (submitted on Jan. 18, 2013), small groups rates for 1Q2013 are consistent with the rates for similar products that been offered by the Business Resource Services (BRS) Association (see iv. below).  As a result of the amended filing, the overall average rate increase for 1Q2013 renewals is lower than 8.3%.
• ii. For second quarter 2013 renewals, the overall average annual rate increase being proposed is 10.3% (above 2Q2012 rates).
• iii. For third quarter 2013 renewals, the overall average annual rate increase being proposed is 15.25% (above 3Q2012 rates).
• iv. The 1Q filing also includes the rates for products that were offered by the former BRS.  The rate development of these products was separate from and independent of the rating of the other BCBSVT Small Group products. BCBSVT states that the former BRS products will be offered only in January of 2013.  The proposed average rate increase for the members with former BRS products who are renewing during the first quarter of 2013 is 12.4%.

First through Third Quarter BCBSVT Small Group Rate Filing:

First Quarter Rates

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

There are 12 first quarter-renewing BCBSVT Small Group members (9 subscribers). The renewal rates for these members were developed by applying an average quarterly rate increase due to trend of 1.7% (from the approved First through Second Quarter 2013 BCBSVT Trend filing), to the approved Fourth Quarter 2012 BCBSVT Small Group rates. The rates have also been adjusted for:

1. the estimated impact of the change in the drug out-of-pocket maximum
(according to the 2013 IRC limits, as mandated in the Vermont Act 171), and

2. a 2.0% contribution to reserve, as allowed by the approved Q1 2013
Administrative Charges and Contribution to Reserve filing.

The proposed average rate increase for the members with BCBSVT Small Group
products who are renewing during the first quarter of 2013 is 8.268%.

The filing also includes the rates for products that were offered by the former
Business Resource Services (BRS) Association. These former BRS products will be offered only in January of 2013. The rate development of these products was separate from and independent of the rating of the other BCBSVT Small Group products. Based on the claims experience of the BRS group over the July 1, 2011 through June 30, 2012 period, plus the cost of state and federal mandates and fees, as well as administrative charges, the calculated rate increase is 24.1%.

However, due to a rate cap (equal to 10 percent plus the cost of new mandates or assessments) negotiated between BCBSVT and BRS one year ago, the proposed average rate increase is 12.4%. Although BRS is no longer a functioning association, BCBSVT is honoring its commitment to the members who are continuing their health insurance coverage with these former BRS products.

The proposed average rate increase for the members with former BRS products who are renewing during the first quarter of 2013 is 12.401%.

First through Third Quarter BCBSVT Small Group Rate Filing:

Second Quarter Rates

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

There are 8 second quarter-renewing BCBSVT Small Group members (8 subscribers).

The renewal rates for these members were developed by applying an average quarterly rate increase due to trend of 1.7% (from the approved First through Second Quarter 2013 BCBSVT Trend filing), to the filed First Quarter 2013 BCBSVT Small Group rates.

The proposed average rate increase for the members with BCBSVT Small Group products who are renewing during the second quarter of 2013 is 10.326%.

First through Third Quarter BCBSVT Small Group Rate Filing:

Third Quarter Rates

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

There are 3 third quarter-renewing BCBSVT Small Group members (3 subscribers).

The renewal rates for these members were developed by applying an average quarterly rate increase due to trend of 1.7% (from the approved First through Second Quarter 2013 BCBSVT Trend filing), to the filed Second Quarter 2013 BCBSVT Small Group rates.

The proposed average rate increase for the members with BCBSVT Small Group products who are renewing during the third quarter of 2013 is 15.252%.

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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.