The Empire Plan is a unique health insurance plan designed especially for public employees in New York State. Empire Plan benefits include inpatient and outpatient hospital coverage, medical/surgical coverage, Centers of Excellence for transplants, infertility and cancer, home care services, equipment and supplies, mental health and substance abuse coverage and prescription drug coverage.
GOVERNOR
DEPARTMENT OF CIVIL SERVICE
ALBANY, NEW YORK 12239
www.cs.ny.gov
COMMISSIONER
DANIEL E. WALL
EXECUTIVE
DEPUTY COMISSIONER
PA97-08
TO: Participating Agency Health Benefits Administrators
FROM: The Employee Benefits Division
SUBJECT: Empire Plan Quarterly Experience Report
DATE: June 13, 1997
Enclosed are the First Quarter Empire Plan Experience Report for 1997 and the cover letter to Chief Executive Officers.
This report provides final 1996 experience, projected 1997 experience, and projected 1998 premium rates.
June 16, 1997
Dear Chief Executive Officer:
Enclosed is the Participating Agencies Empire Plan 1997 First Quarter Experience Report. This report provides final 1996 Empire Plan experience, projected 1997 experience based on claims paid through March 1997, and projected 1998 premium rates.
The Empire Plan carriers have declared a surplus for 1996 of $219.8 million, 12.2% of premium. A review of the annual experience of each of the carriers is included in the report.
Initial projections of 1997 experience, based on claims paid through March 1997, reflect a surplus of approximately $46.4 million or 2.6% of premium. The report includes details for each of the carriers and, as in the past, these projections will be revised in the next quarterly report based on actual claims experience for 1997.
The 1998 premium rate projections for each of the options are included in Exhibit III. Based on carrier projections and certain assumptions related to the application of dividend and the recoupment of a modest deficit, the gross and net premiums are projected to increase approximately 5.0% and 8.0% respectively. The report discusses the basis for these projections, and future reports will include revisions based on actual claims data available.
Also included in this report is corrected and updated information on the New York Health Care Reform Act (HCRA) of 1996 which became effective on January 1, 1997, and replaces NYPHRM. PA Memo 97-06 provides details on HCRA and is included as Attachment A.
I hope this report is informative and useful to you. If you have any questions, comments or suggestions, please do not hesitate to contact me.
Sincerely,
Robert W. DuBois, CEBS
Director
Employee Benefits Division
EMPIRE PLAN EXPERIENCE REPORT
JANURAY - MARCH 1997
produced for
PARTICIPATING AGENCIES IN THE
NEW YORK STATE
HEALTH INSURANCE PROGRAM
by
the Employee Benefits Division
New York State Department of Civil Service
George C. Sinnott
President, New York State Civil Service Commission
NYS HEALTH INSURANCE PROGRAM
PARTICIPATING AGENCY GROUP
EMPIRE PLAN EXPERIENCE REPORT
1ST QUARTER REPORT
1996 EMPIRE PLAN EXPERIENCE
The Empire Plan carriers have declared a composite dividend of $219.8 million or 12.2% of premium. The declared dividend is $165.3 million greater than the margin loaded in the 1996 rates and is being held in interest bearing accounts to be used to temper the impact of future rate increases. The 1996 annual experience reported by the insurance carriers is presented in Exhibit I while the individual carrier dividends are explained as follows:
Blue Cross
Blue Cross declared a 1996 dividend of $107.2 million or 16.6% of premium. This represents an $87.9 million increase over the margin loaded in the 1996 rates and is primarily due to a $35.5 million decrease in the 1995 claim base used in the 1996 rate development. This improvement was caused in large part by Blue Cross's underassessment of the impact of electronic claim submissions. An additional $47.7 million of projected dividend is due to the reduction of projected 1996 claim trend from 7.6% to negative 1.0%. Additionally, retention charges were $4.7 million lower than the amount loaded in the 1996 rates.
MetraHealth Medical
MetraHealth declared a composite 1996 dividend of $38.8 million or 5.3% of premium representing a $17.1 million increase over the margin loaded in the 1996 rates. The modest increase in the projected dividend is attributable to a number of factors including an increase in the 1995 claim base offset by a modest decrease in the actual 1996 trend over the amount projected at renewal. Retention charges are also $9.9 million lower than originally assumed.
MetraHealth Mental Health and Substance Abuse Program
MetraHealth declared a 1996 surplus of $20.0 million or 18.0% of premium for the Mental Health and Substance Abuse (MHSA) Program. This represents an increase of $15.2 million over the margin loaded in the 1996 rates and is the result of the continuous improvement in reducing unnecessary and inappropriate inpatient utilization in the latter half of 1995 and through 1996. This continuous improvement was not considered in the development of the 1996 rates. In addition, administrative expenses are approximately $4.0 million lower than the budgeted amount
Cigna
A 1996 dividend of $53.7 million or 17.0% of premium was declared by CIGNA. This represents a $45.0 million increase over the margin loaded in the 1996 rates. This increase Is primarily attributable to higher than anticipated savings generated from the Select Pharmacy Network plan and plan design changes, as well as and a significant reduction in the CIGNA'S anticipated trend from 17.6% to 10.2% in 1996.
PROJECTED 1997 EMPIRE PLAN EXPERIENCE
Based on claims paid through March 1997, the Empire Plan carriers project a composite surplus of $46.4 million or 2.6% of premium. This represents a modest decrease of $4.5 million from the margin loaded in the 1997 rates. The 1997 annual experience projected by the insurance carriers is reported in Exhibit II. Individual carrier projections are explained as follows:
Blue Cross
Blue Cross projects a 1997 dividend of $15.7 million or 2.7% of premium. This represents a modest decrease of $1.9 million over the margin loaded in the 1997 rates. At this time, the rating of this component of the Empire Plan is considered very good given the impact of the HCRA legislation on January 1, 1997. In general, the modest decrease is attributable to a slightly higher 1997 claim base and retention costs than what were projected at the time the rates were developed.
MetraHealth Medical
MetraHealth projects a composite 1997 dividend of $3.3 million or 0.4% of premium representing an $18.9 million decrease over the margin loaded in the 1997 rates. This dividend reduction is attributable to the understatement of the Open and Unreported Claims Reserve as of 12/31/96 and a modest increase in the 1996 claim base from the amount projected at the time the 1997 rates were developed.
MetraHealth Mental Health and Substance Abuse Program
MetraHealth projects a 1997 surplus of $6.8 million or 6.6% of premium for the Mental Health and Substance Abuse (MHSA) Program. This represents an increase of $4.3 million over the margin loaded in the 1997 rates and is attributable to reductions to the 1996 claim base and retention from the amounts projected at the time the 1997 rates were developed.
Cigna
A 1997 dividend of $20.6 million or 6.4% of premium is estimated by CIGNA. This represents an $11.9 million increase over the margin loaded in the 1997 rates and is attributable to the continued favorable impact of Select Network discounts and improved claim trends.
1998 PREMIUM RATES
Exhibit Ill presents the projected 1998 Empire Plan gross and net rates in comparison to the 1997 rates. The 1998 net rates assume the application of $155.5 million in dividend to all payors. Empire Plan gross premium is projected to increase approximately 5.0% with a net premium increase of 8.0%. The higher rate of increase in net premium in relation gross premium results from the amount of dividend used in this projection of 1998 rates. The actual amount of dividend used will be decided during the rate renewal process later this year.
Effective 1/1/98, new contracts are expected to be awarded for the Prescription Drug and Managed Mental Health and Substance Abuse Programs. It is further expected that such awards may reduce the rate of increase by approximately 2% - 3% from the projections made in Exhibit III. Each Participating Agency should assess its financial situation in using the quoted range of rates.
The projected net rate increase for the MediPrime group is modestly higher than the rate increase for the PlanPrime group. 1998 will be the first year that the dividend credit is based on the five tier rate structure. Consequently, while the total Participating Agency dividend remains the same as it would have been under the two tier rate structure, the allocation is different. This results in a lower amount of dividend being allocated to MediPrime. Historically, dividend credits are allocated in relation to the original premiums billed. Since MediPrime premium is lower than PlanPrime premium. the dividend allocation reflects this premium differential. This practice is integral to the 1998 rate development.
The composite rate increase under the 5 tier basis is also modestly greater than the composite rate increase under the 2 tier basis. This is due to the fact that the 1996 5 tier rate generated approximately $6 million less than the 2 tier premium liability due to the Empire Plan carriers. Since any deviation between the 2 tier and 5 tier rates are adjusted in subsequent premium rates, we have assumed the recoupment of this deficit in presenting the projected 1998 rates. As with the actual amount of dividend to be applied, the decision on how much, if any, of this deficit will be recouped in 1998 will be made later this year.
The underlying trend assumptions used by the carriers for the 1998 Participating Agency Rates are as follows:
| Component | Trend |
|---|---|
| Blue Cross | 3.4% |
| MetraHealth Medical Core | 4.7% |
| MetraHealth Medical Enhancement | 7.9% |
| MetraHealth MHSA Core | 3.0% |
| MetraHealth MHSA Enhancement | 3.0% |
| Cigna | 13.0% |
| Composite | 6.1% |
These trend factors reflect the continuing favorable trends observed by the Empire Plan carriers which are reflective of strong claims management and prudent plan design changes over the recent years.
For comparison purposes, Exhibit IV presents the individual and family rate history for the Core plus Medical and Psychiatric Enhancements option based on the Two Tier Empire Plan rate structure in effect prior to 1/1/96.
KEEPING YOU INFORMED
Health Care Reform Act
In the last Quarteriy Experience Report, information was provided about the New York Health Care Reform Act (HCRA) of 1996 which became effective January 1,1997. PA Memo 97-06 was issued on May 14,1997, to all Health Benefits Administrators and provides corrected, updated information on the new surcharges and assessment imposed by this legislation. This Memo is included with this report as Attachment A; please review it carefully, since it specifies who is responsible for paying the surcharge under the Participating Provider and Non-Participating Provider programs. as well as for enrollees covered by Medicare, and describes the interim procedure for handling the surcharge.
As indicated, information on the HCRA and related surcharge will be provided in a future issue of the Empire Plan report which will be mailed directly to enrollees.
PA 97-06
NY 97-12
PE 97-10
Health Care Reform Act - Surcharge
The New York Health Care Reform Act (HCRA) of 1996 took effect on January 1, 1997. This legislation replaces the New York Prospective Hospital Reimbursement Methodology (NYPHRM). As of the effective date, hospital rates were deregulated. Several new surcharges and assessments are being used to cover the costs of bad debt and charity care, Graduate Medical Education and health care initiatives, which were previously funded under NYPHRM.
Empire Plan enrollees will be afllected most directly by an 8.18% surcharge which is applied to inpatient and outpatient services provided by general hospitals, services rendered by diagnostic and treatment centers that provide comprehensive primary care services or ambulatory surgical services, and services of free standing clinical laboratories. The surcharge applies to services by these designated providers located in New York State. When laboratory samples are collected or drawn outside of New York State, related laboratory services are exempt from the surcharge.
Participating Provider Services
Under HCRA, the Empire Plan carriers are responsible for paying the 8.18% surcharge when an enrollee uses a participating provider for covered services. The enrollee is responsible only for the amount of the Plan copayment and should not pay the provider any portion of the surcharge.
Non-Participating Provider Services
When an enrollee uses a non-participating provider the enrollee is responsible for paying any applicable surcharge to the provider until the deductible is met. The surcharge amount is a claim expense under the Plan and is applied toward the deductible, out-of-pocket maximum. or non-network benefit maximums. When an enrollee uses a non-participatng provider the enrollee is responsible for paying the surcharge on any expenses not reimbursed by the plan. This would include any coinsurance amount, amounts above reasonable and customary, and non-covered services. The enrollee pays any surcharge that is his/her responsibility directly to the provider.
Providers and insurance companies are responsible for forwarding surcharge amounts to the Department of Health.
Enrollees Covered By Medicare
For enrollees covered by Medicare, the surcharge applies only when Medicare benefits for a particular service are exhausted, or if the service is not covered by Medicare.
Interim Method of Handling the Surcharge on Amounts Applied to the Deductible
Until MetraHealth is able to make the necessary changes in its claim payment system, the Plan will be paying the surcharge an covered expenses which are applied to the deductible. MetraHealth expects that its system will be updated by August: at that time enrollees will become responsible for paying the surcharge on amounts applied to the deductibles and MetraHealth will begin treating those surcharge payments as claim expenses.
Additional Information
Information on the HCRA and the related surcharge will be provided in a future issue of the Empire Plan Report which will be mailed directly to enrollees.
Who To Call
Enrollees and providers who have questions about their surcharge liability for Empire Plan expenses covered by MetraHealth, may call MetraHealth at 1-800-942-4640 For information about surcharges on Blue Cross covered expenses. Call Blue Cross at 1-800-342-9815.
Questions and Answers:
Q. Will Empire Plan enrollees be responsible for paying any portion of the surcharge on Blue Cross covered expenses?
A. No. Since an enrollee's only out-of-pocket expense for Blue Cross covered services is the copayment for outpatient services, the enrollee pays only the amount of the copayment. The Plan is responsible for paying the entire surcharge.
Q. When Empire Plan enrollees use a Participating Provider for covered services does the enrollee have to pay any portion of the surcharge?
A. No. The enrollee should pay no more than the amount of the copay. The Plan is responsible for paying the entire surcharge.
Q. How does an Empire Plan enrollee know what portion of any applicable surcharge (s)he should be paying?
A. When an enrollee receives covered services from a participating provider or receives services which are covered by Blue Cross, the enrollee is not responsible for paying; any portion of the surcharge.
When an enrollee uses a non-participating provider. the enrollee will not know what portion of any applicable surcharge (s)he is responsible for until MetraHealth has processed the claim. Therefore, the enrollee should ask the provider to defer collection of any surcharge until after an EOB is received from MetraHealth. Then the enrollee should give the provider a copy of the EOB so that the provider can determine the amount of any surcharge that the provider should collect from the enrollee. A provider may require payment of all charges, including applicable surcharge amounts, at the time services are rendered. In that case, if the enrollee's EOB indicates that the Plan has paid all or part of applicable surcharge amounts, the enrollee should provide a copy of the EOB to the provider in order to obtain a refund of the amount of surcharge paid by the Plan.
Q. Are HMOs subject to the surcharge?
A. Yes. However, the surcharge does not change the amount of any copayment an HMO enrollee is required to pay.
Q. Are HMOs subject to the surcharge?
A. Yes. However, the surcharge does not change the amount of any copayment an HMO enrollee is required to pay.
Exhibit I
1996 EMPIRE PLAN EXPERIENCE
In (000's)
|
| BLUE CROSS | UnitedHealthcare MEDICAL - Core | UnitedHealthcare MEDICAL - | UnitedHealthcare MEDICAL - | UnitedHealthcare MEDICAL - | GHI MHSA - Core | GHI MHSA - | GHI MHSA - | GHI MHSA - | CIGNA | TOTAL |
|---|---|---|---|---|---|---|---|---|---|---|---|
| A | 645,187 | 552,720 | 116,387 | 62,034 | 731,141 | 85,900 | 13,779 | 11,445 | 111,124 | 314,967 | 1,802,419 |
| B | 508,558 | 484,876 | 73,096 | 62,658 | 620,630 | 61,054 | 6,971 | 5,954 | 73,979 | 247,546 | 1,450,713 |
| C | 29,454 | 55,828 | 9,368 | 6,474 | 71,670 | 13,468 | 1,985 | 1,651 | 17,104 | 13,728 | 131,956 |
| D | 107,175 | 12,016 | 33,923 | (7,098) | 38,841 | 11,378 | 4,823 | 3,840 | 20,041 | 53,693 | 219,750 |
(1) Earned Premium - Premium which pays for coverage for the period reported (accrual basis).
(2) Incurred Claims - Represents the cost of covered services provided during the period reported by the insurance company (accrual basis).
(3) Administrative Expenses - All charges by the insurance carrier other than for the payment of claims. Includes carrier's cost to administer the program, interest charges, and retention.
Source: 1996 Final Experience Statements
Exhibit I
1997 PROJECTED EMPIRE PLAN EXPERIENCE
In (000's)
|
| BLUE CROSS | UnitedHealthcare MEDICAL - Core | UnitedHealthcare MEDICAL - | UnitedHealthcare MEDICAL - | UnitedHealthcare MEDICAL - | GHI MHSA - Core | GHI MHSA - | GHI MHSA - | GHI MHSA - | CIGNA | TOTAL |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Premium (1) | 571,748 | 601,576 | 83,081 | 79,547 | 764,204 | 83,555 | 10,333 | 8,914 | 102,802 | 320,393 | 1,759,147 |
| Incurred Claims (2) | 520,496 | 543,218 | 77,760 | 64,705 | 685,683 | 66,127 | 7,109 | 5,819 | 79,055 | 284,879 | 1,570,113 |
| Administrative Expense (3) | 35,563 | 60,512 | 7,956 | 6,759 | 75,227 | 13,922 | 1,621 | 1,376 | 16,919 | 14,928 | 142,637 |
| Gain/(Loss) (A-B-C) | 15,689 | (2,154) | (2,635) | 8,083 | 3,294 | 3,506 | 1,603 | 1,719 | 6,828 | 20,586 | 46,397 |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
Source: 1997 1st Quarter Report
Exhibit III
EMPIRE PLAN
Participating Agency Premium Rates
Comparison of 1997 and Projected 1998 Rates
CORE ONLY
Plan Prime - Individual
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 226.25 | 229.04 | 1.2% | 212.92 | 212.57 | -0.2% |
| Best Estimate | 226.25 | 237.83 | 5.1% | 212.92 | 221.36 | 4.0% |
| Pessimistic | 226.25 | 246.06 | 8.8% | 212.92 | 229.59 | 7.8% |
Plan Prime - Family
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 465.78 | 472.54 | 1.5% | 436.52 | 436.46 | 0.0% |
| Best Estimate | 465.78 | 490.77 | 5.4% | 436.52 | 454.69 | 4.2% |
| Pessimistic | 465.78 | 507.84 | 9.0% | 436.52 | 471.76 | 8.1% |
MediPrime - Individual
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 141.10 | 151.76 | 7.6% | 128.07 | 136.96 | 6.9% |
| Best Estimate | 141.10 | 155.40 | 10.1% | 128.07 | 140.60 | 9.8% |
| Pessimistic | 141.10 | 158.69 | 12.5% | 128.07 | 143.89 | 12.4% |
MediPrime - Family - 1
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 381.17 | 396.01 | 3.9% | 352.21 | 361.59 | 2.7% |
| Best Estimate | 381.17 | 409.09 | 7.3% | 352.21 | 374.67 | 6.4% |
| Pessimistic | 381.17 | 421.24 | 10.5% | 352.21 | 386.82 | 9.8% |
MediPrime - Family - 2
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 295.30 | 317.74 | 7.6% | 266.64 | 284.98 | 6.9% |
| Best Estimate | 295.30 | 325.68 | 10.3% | 266.64 | 292.92 | 9.9% |
| Pessimistic | 295.30 | 332.91 | 12.7% | 266.64 | 300.15 | 12.6% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
Exhibit III
EMPIRE PLAN
Participating Agency Premium Rates
Comparison of 1997 and Projected 1998 Rates
CORE PLUS MEDICAL ENHANCEMENT
Plan Prime - Individual
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 258.45 | 260.94 | 1.0% | 238.01 | 244.30 | 2.6% |
| Best Estimate | 258.45 | 271.41 | 5.0% | 238.01 | 254.77 | 7.0% |
| Pessimistic | 258.45 | 281.32 | 8.8% | 238.01 | 264.68 | 11.2% |
Plan Prime - Family
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 530.18 | 535.83 | 1.1% | 484.94 | 499.43 | 3.0% |
| Best Estimate | 530.18 | 557.40 | 5.1% | 484.94 | 521.00 | 7.4% |
| Pessimistic | 530.18 | 577.80 | 9.0% | 484.94 | 541.40 | 11.6% |
MediPrime - Individual
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 150.37 | 158.33 | 5.3% | 130.24 | 143.53 | 10.2% |
| Best Estimate | 150.37 | 7.9% | 5.6% | 147.52 | 13.3% | 10.9% |
| Pessimistic | 150.37 | 165.95 | 10.4% | 130.24 | 151.15 | 16.1% |
MediPrime - Family - 1
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 422.64 | 433.98 | 2.7% | 377.71 | 399.41 | 5.7% |
| Best Estimate | 422.64 | 449.05 | 6.2% | 377.71 | 414.48 | 9.7% |
| Pessimistic | 422.64 | 463.21 | 9.6% | 377.71 | 428.64 | 13.5% |
MediPrime - Family - 2
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 313.84 | 330.38 | 5.3% | 269.22 | 297.63 | 10.6% |
| Best Estimate | 313.84 | 338.98 | 8.0% | 269.22 | 306.23 | 13.7% |
| Pessimistic | 313.84 | 346.88 | 10.5% | 269.22 | 314.13 | 16.7% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
Exhibit III
EMPIRE PLAN
Participating Agency Premium Rates
Comparison of 1997 and Projected 1998 Rates
CORE PLUS MEDICAL & PSYCHIATRIC ENHANCEMENTS
Plan Prime: Individual
| | GROSS RATES (1) 1997 | GROSS RATES (1) 1998 | GROSS RATES (1) 1998 | NET RATES (2) 1997 | NET RATES (2) 1998 | GROSS RATES (1) 1998 |
|---|---|---|---|---|---|---|
| Optimistic | 261.80 | 263.20 | 0.5% | 240.22 | 245.37 | 2.1% |
| Best Estimate | 261.80 | 273.78 | 4.6% | 240.22 | 255.95 | 6.5% |
| Pessimistic | 261.80 | 283.81 | 8.4% | 240.22 | 265.98 | 10.7% |
Plan Prime: Family
| | GROSS RATES (1) 1997 | GROSS RATES (1) 1998 | GROSS RATES (1) 1998 | NET RATES (2) 1997 | NET RATES (2) 1998 | GROSS RATES (1) 1998 |
|---|---|---|---|---|---|---|
| Optimistic | 537.96 | 541.01 | 0.6% | 489.22 | 501.46 | 2.5% |
| Best Estimate | 537.96 | 562.85 | 4.6% | 489.22 | 523.30 | 7.0% |
| Pessimistic | 537.96 | 583.53 | 8.5% | 489.22 | 543.98 | 11.2% |
MediPrime: Individual
| | GROSS RATES (1) 1997 | GROSS RATES (1) 1998 | GROSS RATES (1) 1998 | NET RATES (2) 1997 | NET RATES (2) 1998 | GROSS RATES (1) 1998 |
|---|---|---|---|---|---|---|
| Optimistic | 150.53 | 158.39 | 5.2% | 129.28 | 143.50 | 11.0% |
| Best Estimate | 150.53 | 162.38 | 7.9% | 129.28 | 147.49 | 14.1% |
| Pessimistic | 150.53 | 166.01 | 10.3% | 129.28 | 151.12 | 16.9% |
MediPrime: Family - 1
| | GROSS RATES (1) 1997 | GROSS RATES (1) 1998 | GROSS RATES (1) 1998 | NET RATES (2) 1997 | NET RATES (2) 1998 | GROSS RATES (1) 1998 |
|---|---|---|---|---|---|---|
| Optimistic | 427.23 | 436.96 | 2.3% | 378.82 | 400.35 | 5.7% |
| Best Estimate | 427.23 | 452.19 | 5.8% | 378.82 | 415.58 | 9.7% |
| Pessimistic | 427.23 | 466.51 | 9.2% | 378.82 | 429.90 | 13.5% |
MediPrime: Family - 2
| | GROSS RATES (1) 1997 | GROSS RATES (1) 1998 | GROSS RATES (1) 1998 | NET RATES (2) 1997 | NET RATES (2) 1998 | GROSS RATES (1) 1998 |
|---|---|---|---|---|---|---|
| Optimistic | 315.24 | 331.16 | 5.1% | 267.15 | 297.48 | 11.4% |
| Best Estimate | 315.24 | 339.80 | 7.8% | 267.15 | 306.12 | 14.6% |
| Pessimistic | 315.24 | 347.75 | 10.3% | 267.15 | 314.07 | 17.6% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
Exhibit IV
EMPIRE PLAN
PA GROUP RATES
1985-1998 Monthly Rates
Core plus Med. & Psych. Enh. - Individual
| Year | Gross Rate | % Changes | Net Rate | % Change |
|---|---|---|---|---|
| 1985* | 95.71 | 92.85 | ||
| 1986 | 91.97 | -3.9% | 91.45 | -1.5% |
| 1987 | 103.14 | 12.1% | 101.65 | 11.1% |
| 1988 (1) | 142.01 | 37.7% | 141.52 | 39.2% |
| 1989 | 168.72 | 18.8% | 168.05 | 18.7% |
| 1990 (2) | 179.50 | 6.4% | 167.09 | -0.6% |
| 1991 (3) | 202.09 | 12.6% | 185.09 | 10.8% |
| 1992 | 198.85 | -1.6% | 181.81 | -1.8% |
| 1993 | 214.30 | 7.8% | 194.64 | 7.1% |
| 1994 | 213.83 | -0.2% | 197.39 | 1.4% |
| 1995 | 214.70 | 0.4% | 193.54 | -2.0% |
| 1996 (4) | 219.20 | 2.1% | 192.27 | -0.7% |
| 1997 | 219.87 | 0.3% | 198.37 | 3.2% |
| 1998 (Projected) | 233.27 | 6.1% | 214.25 | 8.0% |
Individual Average Percent Increase
| Gross Rate % Changes | Net Rate % Change | |
|---|---|---|
| From Inception | 7.6% | 7.2% |
| Most Recent 10 Years | 5.3% | 4.4% |
| Most Recent 5 Years | 1.7% | 2.0% |
Core plus Med. & Psych. Enh. - Family
| Year | Gross Rate | % Changes | Net Rate | % Change |
|---|---|---|---|---|
| 1985 | 203.97 | 197.57 | ||
| 1986 | 195.31 | -4.2% | 194.30 | -1.7% |
| 1987 | 222.39 | 13.9% | 219.20 | 12.8% |
| 1988 (1) | 324.13 | 45.7% | 323.06 | 47.4% |
| 1989 | 383.42 | 18.3% | 381.95 | 18.2% |
| 1990 (2) | 403.75 | 5.3% | 380.15 | -0.5% |
| 1991 (3) | 464.39 | 15.0% | 417.36 | 9.8% |
| 1992 | 445.64 | -4.0% | 407.76 | -2.3% |
| 1993 | 479.37 | 7.6% | 426.35 | 4.6% |
| 1994 | 484.69 | 1.1% | 446.94 | 4.8% |
| 1995 | 486.99 | 0.5% | 440.35 | -1.5% |
| 1996 (4) | 491.07 | 0.8% | 428.27 | -2.7% |
| 1997 | 495.81 | 1.0% | 447.22 | 4.4% |
| 1998 Projected | 518.93 | 4.7% | 476.73 | 6.6% |