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
PA01-01
TO: Participating Agency Health Benefits Administrators
FROM: The Employee Benefits Division
SUBJECT: Empire Plan Quarterly Experience Report
DATE: January 10, 2001
Enclosed are the Third Quarter Empire Plan Experience Report for 2000 and the cover letter to Chief Executive Officers. This report provides projected year 2000 experience and premium rates for the year 2001.
EMPIRE PLAN THIRD QUARTER EXPERIENCE REPORT
JULY — SEPTEMBER 2000
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
- Projected 2000 Empire Plan Experience
- 2001 Premium Rates.
- Keeping You Informed
- Attachment 1 — Transmission of Reports Electronically
- Attachment 2 — PA Regional Meeting Handouts
Exhibits
I 2000 Projected Empire Plan Experience
II Empire Plan PA 2001 Premium Rates
III Empire Plan PA Group Rates 1985-2001
IV Empire Plan PA 5 Tier Group Rates 1995-2001
NYS HEALTH INSURANCE PROGRAM
PARTICIPATING AGENCY GROUP
EMPIRE PLAN EXPERIENCE REPORT
3RD QUARTER REPORT
PROJECTED 2000 EMPIRE PLAN EXPERIENCE
Based on claims paid through September 30, 2000, the Empire Plan carriers project a composite dividend of $89.3 million (3.9% of premium), or $31.1 million more than the margin loaded in the 2000 rates. The 2000 annual experience projected by the insurance carriers is reported in Exhibit I.
This modestly higher projected dividend in comparison to the margin load is primarily the blended result of lower projected claims under both the Blue Cross and Cigna components offset by higher projected claims under the UnitedHealthcare (UHC) component. The changes to these carrier projections primarily relate to the 1999 claim base projected at the time the 2000 rates were developed. While the 1999 claim base is lower, the trend factors on all benefit components are rising. For Plan Year 2001, the aggregate trend factor is 13.1%.
Though Cigna’s surplus projection is $47.4 million, such amount must first be used to offset the 1999 loss of $39.8 million and results in a projected dividend of $7.6 million. While loss recovery was envisioned, it occurred sooner than expected. The lower claims experience is attributable to utilization mix savings resulting from the change in the copay amounts effective 1/1/2000. Though these savings benefit the current and future experience, we must note that the trend factor developed by the carrier is 24% and reflects the increasing costs of prescription drugs.
2001 PREMIUM RATES
Exhibit II presents 2001 Empire Plan gross and net premium rates, assuming the application of $74.0 million in dividend to all payors. In the aggregate, the Empire Plan gross premium increased approximately 10.8% while the net premium increased 10.2%.
For comparison purposes, Exhibit III 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 January 1, 1996, while Exhibit IV presents the five tier history from 1996 to 2001.
KEEPING YOU INFORMED
Long Term Care Insurance Program
Under the provisions of the enabling legislation, Participating Agencies may offer this program to their employees and eligible dependents. The definition of who is eligible for this coverage will be different from the definition for health insurance coverage. We expect that this important new program will offer affordable, valuable protection for employees, dependents and their parents.
You will begin receiving information about this program during the second quarter of this year. As more detailed information becomes available to us we will share it with you in future reports.
Transmission of Reports Electronically
The Employee Benefits Division has the capability to transmit the Participating Agency Quarterly Experience Report via E-mail. Using a software product called Adobe Acrobat Readerä , the PA Quarterly Report is converted into a portable document format (PDF). This is a format that can be read by any recipient, if they have Adobe Acrobat Readerä installed on their system. Adobe Acrobat Reader™ is available free from Adobe Systems, Inc., at http://www.adobe.com.
There are many advantages to receiving the reports electronically including: reports will be received sooner; there will be less paper to handle; and the reports can be stored electronically and/or a hard copy may be printed.
If you would like to receive the report electronically, please provide your E-mail address by completing the bottom section of Attachment 1 and returning it to the Employee Benefits Division.
PA Regional Meetings
The 2000 PA Regional Meetings were held on November 8 in Rockland County, November 9 in Suffolk County and November 14 in Saratoga County. About 370 people attended. Attachment 2 includes the agenda and handout materials. In addition to the financial issues, the Empire Plan carriers provided an update of benefits, and presented new programs including the Empire Plan Nurseline, Centers of Excellence for Transplants, Centers of Excellence for Infertility Treatment, and the Cardiovascular Risk Reduction Program. Further information on these benefits will be included in upcoming issues of the Empire Plan Report.
Name and Address Changes
Please be sure to notify the Employee Benefits Division of any changes so that we may keep our mailing lists up-to-date. This updated information may be sent to:
Mr. Stephen Kavanaugh
Assistant Director
Employee Benefits Division
NYS Department of Civil Service
State Office Campus, Building #1
Albany, NY 12239
Attachment 1
TRANSMISSION OF REPORTS ELECTRONICALLY
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If you would like to receive the report electronically, please complete this form and return it to:
Mr. Stephen Kavanaugh
Assistant Director
Employee Benefits Division
NYS Department of Civil Service
State Office Campus, Building #1
Albany, NY 12239
Agency Code:
Agency Name:
Contact Person:
E-mail Address:
Phone Number:
Exhibit I
2000 PROJECTED EMPIRE PLAN EXPERIENCE
In (000's)
|
| BLUE CROSS | UnitedHealthcare MEDICAL - Core | UnitedHealthcare MEDICAL - NY Enhancement | UnitedHealthcare MEDICAL - PA Enhancement | UnitedHealthcare MEDICAL - Combined | GHI MHSA - Core | GHI MHSA - NY Enhancement | GHI MHSA - PA Enhancement | GHI MHSA - Combined | CIGNA | TOTAL |
|---|---|---|---|---|---|---|---|---|---|---|---|
| A Premium (1) | 688,016 | 727,226 | 118,447 | 80,594 | 926,267 | 57,936 | 6,560 | 5,517 | 70,013 | 625,019 | 2,309,315 |
| B Incurred Claims (2) | 632,834 | 666,640 | 89,048 | 65,394 | 821,082 | 45,529 | 5,929 | 4,178 | 55,636 | 563,083 | 2,072,635 |
| C Administrative Expense (3) | 29,994 | 74,093 | 9,751 | 6,838 | 90,682 | 10,067 | 1,139 | 960 | 12,166 | 14,537 | 147,379 |
| D Gain/(Loss) (A-B-C) | 25,188 | (13,507) | 19,648 | 8,362 | 14,503 | 2,340 | (508) | 379 | 2,211 | 47,399 | 89,301 |
(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: 2000 3rd Quarter Report
Exhibit II
Empire Plan
Participating Agency Premium Rates
Comparison of 2000 and Final 2001 Rates
Mediprime Rate Structure
CORE ONLY - Non-Medicare
| EMPIRE PLAN OPTION | Gross Rates(1) 2000 | Gross Rates(1) 2001 | Gross Rates(1) % Change | Net Rates(2) 2000 | Net Rates(2) 2001 | Net Rates(2) % Change |
|---|---|---|---|---|---|---|
| Individual (81) | 261.99 | 293.01 | 11.8% | 256.64 | 283.24 | 10.4% |
| Family (82) | 540.83 | 608.59 | 12.5% | 529.89 | 588.51 | 11.1% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
CORE ONLY - Medicare
| EMPIRE PLAN OPTION | Gross Rates(1) 2000 | Gross Rates(1) 2001 | Gross Rates(1) % Change | Net Rates(2) 2000 | Net Rates(2) 2001 | Net Rates(2) % Change |
|---|---|---|---|---|---|---|
| Individual | 209.65 | 236.42 | 12.8% | 206.55 | 230.99 | 11.8% |
| Family - 1 medicare | 489.15 | 553.16 | 13.1% | 480.46 | 537.43 | 11.9% |
| Family - 2 medicares | 436.06 | 495.31 | 13.6% | 429.63 | 483.91 | 12.6% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
CORE PLUS MEDICAL ENHANCEMENT - Non-Medicare
| EMPIRE PLAN OPTION | Gross Rates(1) 2000 | Gross Rates(1) 2001 | Gross Rates(1) % Change | Net Rates(2) 2000 | Net Rates(2) 2001 | Net Rates(2) % Change |
|---|---|---|---|---|---|---|
| Individual (61) | 293.01 | 323.21 | 10.3% | 284.97 | 312.44 | 9.6% |
| Family (62) | 602.75 | 668.99 | 11.0% | 586.46 | 646.91 | 10.3% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
CORE PLUS MEDICAL ENHANCEMENT - Medicare
| EMPIRE PLAN OPTION | Gross Rates(1) 2000 | Gross Rates(1) 2001 | Gross Rates(1) % Change | Net Rates(2) 2000 | Net Rates(2) 2001 | Net Rates(2) % Change |
|---|---|---|---|---|---|---|
| Individual | 217.84 | 245.51 | 12.7% | 214.16 | 239.82 | 12.0% |
| Family - 1 medicare | 528.23 | 592.45 | 12.2% | 516.30 | 575.44 | 11.5% |
| Family - 2 medicares | 452.31 | 513.49 | 13.5% | 444.75 | 501.56 | 12.8% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
CORE PLUS MEDICAL AND PSYCHIATRIC ENHANCEMENT - Non-Medicare
| EMPIRE PLAN OPTION | Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) |
|---|---|---|---|---|---|---|
| Individual (71) | 294.94 | 325.23 | 10.3% | 286.53 | 314.26 | 9.7% |
| Family (72) | 607.33 | 673.67 | 10.9% | 590.16 | 651.09 | 10.3% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
CORE PLUS MEDICAL AND PSYCHIATRIC ENHANCEMENT - Medicare
| EMPIRE PLAN OPTION | Gross Rates(1) 2000 | Gross Rates(1) 2001 | Gross Rates(1) % Change | Net Rates(2) 2000 | Net Rates(2) 2001 | Net Rates(2) % Change |
|---|---|---|---|---|---|---|
| Individual | 217.94 | 245.64 | 12.7% | 214.25 | 239.94 | 12.0% |
| Family - 1 medicare | 530.97 | 595.25 | 12.1% | 518.52 | 577.95 | 11.5% |
| Family - 2 medicares | 453.22 | 514.40 | 13.5% | 445.51 | 502.37 | 12.8% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
Exhibit III
EMPIRE PLAN PA GROUP RATES 1985 - 2001 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% | 91.49 | -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 | 227.35 | 3.4% | 204.38 | 3.0% |
| 1999 | 239.24 | 5.2% | 222.00 | 8.6% |
| 2000 | 260.67 | 9.0% | 253.98 | 14.4% |
| 2001 | 289.41 | 11.0% | 280.25 | 10.3% |
Core plus Med. & Psych. Enh. - Individual Average Percent Increase
| | Gross Rate % Changes | Net Rate % Change |
|---|---|---|
| From Inception | 7.6% | 7.6% |
| Most Recent 10 Years | 3.7% | 4.4% |
| Most Recent 5 Years | 5.8% | 7.9% |
* Statewide Plan Premium Rates
(1) 1988 rates represent the effective amounts of the 1/88 and 8/88 rate changes.
(2) No change in effective net rate over 1989.
(3) Represents rates effective 1/1/91 - 6/30/91
(4) Represents 2 tier Empire Plan Rates; 5 tier rate schedule effective 1/1/96
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 | 514.28 | 3.7% | 463.62 | 3.7% |
| 1999 | 539.14 | 4.8% | 499.75 | 7.8% |
| 2000 | 578.26 | 7.3% | 563.03 | 12.7% |
| 2001 | 640.64 | 10.8% | 619.28 | 10.0% |
Core plus Med. & Psych. Enh. - Family Average Percent Increase
| | Gross Rate % Changes | Net Rate % Change |
|---|---|---|
| From Inception | 8.0% | 8.0% |
| Most Recent 10 Years | 3.4% | 4.1% |
| Most Recent 5 Years | 5.5% | 7.7% |
* Statewide Plan Premium Rates
(1) 1988 rates represent the effective amounts of the 1/88 and 8/88 rate changes.
(2) No change in effective net rate over 1989.
(3) Represents rates effective 1/1/91 - 6/30/91
(4) Represents 2 tier Empire Plan Rates; 5 tier rate schedule effective 1/1/96
Exhibit IV
EMPIRE PLAN
PA 5 TIER GROUP RATES
1995 - 2001 Monthly Rates
Individual Planprime
| Core plus Med. & Psych. Enh. | Gross Rate(1) | % Change | Net Rate(2) | % Change |
|---|---|---|---|---|
| 1995 | 214.70 |
| 193.54 | |
| 1996 (3) | 234.59 | 9.3% | 207.66 | 7.3% |
| 1997 | 261.80 | 11.6% | 240.22 | 15.7% |
| 1998 | 267.89 | 2.3% | 246.07 | 2.4% |
| 1999 | 279.56 | 4.4% | 261.18 | 6.1% |
| 2000 | 294.94 | 5.5% | 286.53 | 9.7% |
| 2001 | 325.23 | 10.3% | 314.26 | 9.7% |
Average Percent Increase
| | Gross Rate % Changes | Net Rate % Change |
|---|---|---|
| From Inception of 5 Tier Structure | 7.2% | 8.5% |
Family Planprime
| Core plus Med. & Psych. Enh. | Gross Rate(1) | % Change | Net Rate(2) | % Change |
|---|---|---|---|---|
| 1995 | 486.99 |
| 440.35 |
|
| 1996 (3) | 521.96 | 7.2% | 459.16 | 4.3% |
| 1997 | 537.96 | 3.1% | 489.22 | 6.5% |
| 1998 | 552.00 | 2.6% | 503.78 | 3.0% |
| 1999 | 573.33 | 3.9% | 531.89 | 5.6% |
| 2000 | 607.33 | 5.9% | 590.16 | 11.0% |
| 2001 | 673.67 | 10.9% | 651.09 | 10.3% |
Average Percent Increase
| | Gross Rate % Changes | Net Rate % Change |
|---|---|---|
| From Inception of 5 Tier Structure | 5.6% | 6.8% |
Individual Medprime
| Core plus Med. & Psych. Enh. | Gross Rate(1) | % Change | Net Rate(2) | % Change |
|---|---|---|---|---|
| 1995 | 214.70 |
| 193.54 |
|
| 1996 (3) | 158.65 | -26.1% | 131.72 | -31.9% |
| 1997 | 150.53 | -5.1% | 129.28 | -1.9% |
| 1998 | 167.91 | 11.5% | 151.34 | 17.1% |
| 1999 | 186.46 | 11.0% | 175.61 | 16.0% |
| 2000 | 217.94 | 16.9% | 214.25 | 22.0% |
| 2001 | 245.64 | 12.7% | 239.94 | 12.0% |
Average Percent Increase
| | Gross Rate % Changes | Net Rate % Change |
|---|---|---|
| From Inception of 5 Tier Structure | 3.5% | 5.6% |
Family - 1 Medprime
| Core plus Med. & Psych. Enh. | Gross Rate(1) | % Change | Net Rate(2) | % Change |
|---|---|---|---|---|
| 1995 | 486.99 |
| 440.35 |
|
| 1996 (3) | 446.03 | -8.4% | 383.23 | -13.0% |
| 1997 | 427.23 | -4.2% | 378.82 | -1.2% |
| 1998 | 452.73 | 6.0% | 409.76 | 8.2% |
| 1999 | 480.95 | 6.2% | 447.05 | 9.1% |
| 2000 | 530.97 | 10.4% | 518.52 | 16.0% |
| 2001 | 595.25 | 12.1% | 577.95 | 11.5% |
Average Percent Increase
| Gross Rate % Changes | Net Rate % Change | |
|---|---|---|
From Inception of 5 Tier Structure | 3.7% | 5.1% |
Family - 2 or More Medprime
| Core plus Med. & Psych. Enh. | Gross Rate(1) | % Change | Net Rate(2) | % Change |
|---|---|---|---|---|
| 1995 | 486.99 |
| 440.35 |
|
| 1996 (3) | 369.87 | -24.0% | 307.07 | -30.3% |
| 1997 | 315.24 | -14.8% | 267.15 | -13.0% |
| 1998 | 351.98 | 11.7% | 314.25 | 17.6% |
| 1999 | 387.05 | 10.0% | 360.66 | 14.8% |
| 2000 | 453.22 | 17.1% | 445.51 | 23.5% |
| 2001 | 514.40 | 13.5% | 502.37 | 12.8% |
Average Percent Increase
| | Gross Rate % Changes | Net Rate % Change |
|---|---|---|
| From Inception of 5 Tier Structure | 2.2% | 4.2% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
(3) Inception of Medprime Rate Structure.