BCBSVT Third Quarter 2013 Catamount Rate Filing.
BCBSVT is proposing an average rate increase of 24.4% above current Catamount rates. The rate increase is effective July 1, 2013 through December 31, 2013 for all renewals and new subscribers.
Third Quarter 2013 Catamount Rate Filing
Blue Cross Blue Shield of Vermont (BCBSVT) is a Vermont company that exists to provide health benefits and financing to Vermonters.
As of January 2013, there are 15,450 Catamount members (14,233 subscribers). BCBSVT is proposing a rate change of +22.048% over the filed January 1, 2013 rates. This equates to a rate change of +24.394% over the Q3 2012 rates.
The estimated loss ratio used in pricing the third quarter 2012 Catamount rates was 93.0%; the projected loss ratio for the July 1, 2012 to June 30, 2013 period is 106.3%. The estimated loss ratio used in pricing the third quarter 2013 Catamount rates is 92.7%.
The rate change of +24.394% is based primarily on BCBSVT’s estimates of the medical and drug costs that the covered Catamount members will incur during the 6-month period beginning July 1, 2013, over that assumed in the Q3 2012 rates. Actual claims costs were 13.3% higher than were projected for the current experience year. Claims costs are expected to rise by 8.4% in the new coverage period (due to the combined effects of a 7.9% annual combined trend, a shortened policy year and the 1.5% impact due to the poorer health status of members transferring to the BCBSVT Catamount product from another carrier who exited the market). Thus these claims costs estimates account for 21.626% of the total +24.394% total rate change (or 89% of the total rate increase).
Approximately 3% of the rate increase (or 0.638% of the total +24.394% rate change) is the result of state and federal assessments and mandates (which include the mandates contained in Vermont Act 171 and Act 158).
The administrative expense charge per member per month (PMPM) and the contribution to reserve (CTR) have both increased from the amounts contained in the third quarter 2012 rates. The administrative expense charge PMPM has increased, but the administrative expense charge as a percent of premium has decreased (from 6% of premium in the third quarter 2012 rates to 5.3% of premium in the third quarter 2013 rates). There is a 2% of premium CTR (approved by the Vermont Department of
Financial Regulation) built into the third quarter 2013 rates; this compares to the 1% of premium CTR built into the third quarter 2012 rates. Together these two changes account for 8.7% of the filed rate increase (or 2.130% of the total +24.394% total rate change).
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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.