BCVT-128904541

RATE FILING SUMMARY

Third and fourth quarter 2013 TVHP trend filing.

The company is proposing base annual trend factors of 5.6% for medical claims, 8.3% for pharmacy claims and 6.1% for combined medical and pharmacy claims.

Third-Fourth Quarter 2013 TVHP Trend Filing

• The Vermont Health Plan (TVHP) is a Vermont company that exists to provide health benefits and financing to Vermonters.

• TVHP is proposing allowed, capped (at $120,000 per member) trends of 5.6
percent for fee-for-service medical and 8.3 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 TVHP products with effective dates during the third and fourth quarters of 2013.

• The medical expense target (MET) increase, negotiated with the PHO(s), will be used to “trend” the MET claims in the rating calculations.

The proposed trends are developed from statistical analyses of claims incurred by TVHP members during the period of June 2008 through October 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 $120,000 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.

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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.