The Vermont Health Plan’s Third through Fourth Quarter Small Group Rate Filing.
The Vermont Health Plan is proposing an overall average annual rate increase of 20.7% (above 3Q2012 rates) for policyholders renewing in the third quarter 2013. For fourth quarter 2013 renewals, the overall average annual rate increase being proposed by the company is 18.4% (above 4Q2012 rates).
Third and Fourth Quarter TVHP Small Group Rate Filing
The Vermont Health Plan (TVHP) is the HMO subsidiary of Blue Cross and Blue Shield of Vermont (BCBSVT). Like BCBSVT, TVHP is a Vermont company that exists to provide health benefits and financing to Vermonters.
For third quarter-renewing TVHP Small Groups, there are 1,213 members (639 subscribers). TVHP is proposing an average rate change of +20.7%, with a range of +19.7% to +24.6%. For fourth quarter-renewing TVHP Small Groups, there are 919 members (501 subscribers). TVHP is proposing an average rate change of +18.4%, with a range of +16.6% to +19.6%. The range of increases varies according to the products chosen by the groups and their members, both currently and upon renewal during the third quarter of 2013.
The estimated loss ratios used in pricing TVHP Small Group third quarter and fourth quarter 2012 TVHP Small Group rates were 87.6% and 86.0% respectively. The estimated loss ratio used in pricing the third and fourth quarters 2013 TVHP Small Group rates is 87.4%.
The average rate change is based primarily on TVHP’s estimates of the medical and drug costs that the covered members will incur. Fee-for-service claims costs are expected to increase by an annual trend rate of by 7.4% in the new coverage period. There is a 17.35% increase in the negotiated 2013 capitation amounts payable to VMC PHO, which accounts for about 30% of the rate increase.
Approximately 3.2% of the total average rate change for the Third Quarter 2013 rates is the result of state and federal assessments and mandates. Most of this is due to the mandates in Vermont Act 171 and Act 158. Fourth Quarter 2012 rates already include these mandates and therefore the Fourth Quarter 2013 increase is less than the Third Quarter 2013 increase.
The administrative expense charge per member per month (PMPM) and the broker commission as a percent of premium have both decreased from those in the third quarter 2012 rates. The contribution to reserve has changed, from 0% to 2% of premium in the Third Quarter 2013 rate but remains unchanged at 2% of premium in the Fourth Quarter rates.
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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.