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
JOHN F. BARR
EXECUTIVE DEPUTY COMMISSIONER
PA03-04
TO: Participating Agency Health Benefit Administrators
FROM: Robert W. DuBois, Director of the Employee Benefits Division
SUBJECT: Empire Plan Quarterly Experience Report
DATE: March 3, 2003
Enclosed are the Fourth Quarter Empire Plan Experience Report for 2002 and the cover letter to the Chief Executive Officers. This report presents the projected 2002 Empire Plan experience as well as projected 2004 premium rates.
Enclosures
Dear Chief Executive Officer:
Attached is the Empire Plan Fourth Quarter Experience Report for 2002. This report presents the projected 2002 Empire Plan experience based on claims paid through December 31, 2002 as well as the projected 2004 premium rates.
The Empire Plan carriers project a 2002 net dividend of $39.8 million, 1.3% of premium. The report explains the basis for this projection. The carriers will issue 2002 experience statements on March 17, 2003.
The projected 2004 premium rates are presented in Exhibit II and reflect a "best estimate" net increase of 18.4%. The report also presents a range of the potential 2004 rate increase for your budget development considerations.
I hope this report is informative and useful to you. If you have any questions, comments or suggestions, please don’t hesitate to contact me.
Sincerely,
Robert W. DuBois, CEBS
Director
Employee Benefits Division
PARTICIPATING AGENCIES
EMPIRE PLAN 2002 FOURTH QUARTER EXPERIENCE REPORT
OCTOBER – DECEMBER 2002
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 2002 Empire Plan Experience: Page 1
2003 Premium Rates: Pages 1-2
Keeping You Informed: Pages 2-3
Attachment 1 – Transmission of Reports Electronically
Exhibits
I. Projected 2002 Empire Plan Experience
II. 2004 Projected PA Premium Rates
III. Empire Plan PA 5-Tier Group Rates 1995-2004
IV. Empire Plan PA 2-Tier Group Rates 1995-2004
NYS HEALTH INSURANCE PROGRAM
PARTICIPATING AGENCY GROUP
EMPIRE PLAN EXPERIENCE REPORT
4TH QUARTER REPORT
PROJECTED 2002 EMPIRE PLAN EXPERIENCE
The Empire Plan carriers project a composite dividend of $39.8 million (1.3% of premium), or $9.4 million less than the margin loaded in the 2002 rates. The 2002 annual experience projected by the insurance carriers is reported in Exhibit I.
Cigna projects a gain of $8.9 million (1.0% of premium) for the Prescription Drug Program, $7.6 million less than the 3rd Quarter projection. The less favorable projection is attributable to a greater than expected increase in claims observed over the last three months of the policy year.
UnitedHealthcare projects a $33.6 million dividend (2.8% of premium) for the Medical Program, $1.7 million greater than the prior quarterly projection. As in prior projections, the projected incurred claims reflect an annual trend factor of 11.2% which is tracking consistently with comparable industry trends.
A loss of $2.1 million (2.8% of premium) is projected by Group Health Incorporated (GHI) for the Mental Health and Substance Abuse Program. The projection represents an improvement of $1.9 million from the 3rd Quarter projection. The projected loss is primarily attributable to an increase in utilization from the level projected at the time of the 2002 rate development. Since 2001, Program trend has increased from 1% to 6%.
Empire BlueCross BlueShield (EBCBS) is projecting a loss of $0.7 million (less than a tenth of a percent of premium) for the Hospital Program, compared to a 3rd Quarter projected dividend of $6.3 million. This shift is largely attributable to an increase in the projected 2002 incurred claim level. The increase is mitigated by a credit of $3.2 million pertaining to the settlement of 2001 administrative expenses. The State and EBCBS recently reached agreement on administrative fees covering the period 2001 – 2005.
2004 PROJECTED PREMIUM RATES
Exhibit II presents the projected 2004 Empire Plan gross and net premium rates assuming the application of $76.0 million in dividend to all payors. In aggregate, the Empire Plan gross premium is projected to increase approximately 16.7% while the net premium is projected to increase 18.4%. The higher net premium increase (compared to the gross premium increase) is reflective of the decrease in dividends that are projected to be applied in the 2004 rates relative to those being applied in the 2003 rates.
A range of projected gross and net premium rates is also included (14.9% - 21.7%). While carrier rate projections made at this time of the year have been historically conservative, the projections made in this report appear to be excessively conservative. Therefore, the optimistic projections appear reasonable at this time; however, each agency should assess its budgetary environment in using the enclosed projections.
Exhibit III presents the individual and family rate history for the Core Plus Medical and Psychiatric Enhancements option based on the 5-tier Empire Plan billing rate history in effect since January 1, 1996. Exhibit IV presents, for illustrative purposes only, the 2-tier rate history from 1995 to 2004.
KEEPING YOU INFORMED
Transmission of Reports Electronically
The Employee Benefits Division has the capability to transmit the Participating Agency Quarterly Experience Report via E-mail in PDF file. 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.
NYSHIP Representation at Municipal Events
NYSHIP’s Empire Plan was represented at the following municipal events:
- The 2003 Legislative Conference, sponsored by the NYS Association of Counties on February 2-4, 2003, in Albany, NY.
- The 2003 Training School and Annual Meeting, sponsored by the Association of Towns of the State of New York on February 16–18, 2003, in New York City.
- The 2003 Legislative Conference, sponsored by the NYS Conference of Mayors on February 23–24, 2003 in Albany, NY.
NYSHIP’s Empire Plan will be represented at:
- The 2003 Annual Conference, sponsored by the NYS Government Finance Officers’ Association on March 1921, 2003, in Albany, NY.
- The 2003 Local Government Conference, sponsored by the NYS Tug Hill Commission on March 27, 2003, in Watertown.
CEO and HBA Name and Address Changes
Please be sure to notify the Employee Benefits Division of any changes in the names and/or addresses of your agency’s CEO or HBA so that we may keep our mailing lists up-to-date. This updated information may be sent to:
Ms. Mary Frye
Acting Director, Employee Insurance Programs
Employee Benefits Division
NYS Department of Civil Service
State Office Campus, Building #1
Albany, NY 12239
TRANSMISSION OF REPORTS ELECTRONICALLY
Instructions to read PDF files using ADOBE ACROBAT READER™:
What is PDF?
It is a file format compatible with many different computers and printers. Adobe Acrobat Reader™ comes in versions that run in DOS, Windows, Mac, UNIX and OS/2. Be sure to download the correct version. Their page contains download instructions.
Disclaimer
The Department of Civil Service is not responsible for Adobe Acrobat Reader™; or your use of it. The information provided herein is provided for your convenience and does not in any way constitute an endorsement of this software product or company.
To Download
Go to Adobe Systems Web Page at:
http://www.adobe.com/supportservice/custsupport/download.html
Follow instructions for downloading under:
Acrobat Reader:
Macintosh | Windows | DOS | UNIX | OS/2
2002 PROJECTED EMPIRE PLAN EXPERIENCE
In (000's)
| EMPIRE 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) | 867,557 | 1,002,354 | 111,526 | 92,155 | 1,206,035 | 60,197 | 7,390 | 5,316 | 72,903 | 861,525 | 3,008,020 |
| (B) Incurred Claims (2) | 803,289 | 878,123 | 100,926 | 84,625 | 1,063,674 | 47,264 | 7,200 | 6,174 | 60,638 | 835,374 | 2,762,975 |
| (C) Administrative Expense (3) | 64,948 | 93,898 | 8,130 | 6,705 | 108,733 | 11,840 | 1,453 | 1,046 | 14,339 | 17,255 | 205,275 |
| (D) Gain/(Loss) (A-B-C) | (680) | 30,333 | 2,470 | 825 | 33,628 | 1,093 | (1,263) | (1,904) | (2,074) | 8,896 | 39,770 |
(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 other retention.
Source: 2002 4th Quarter Report
Exhibit II
Empire Plan
Participating Agency Premium Rates
Comparison of 2003 and Projected 2004 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 | 362.14 | 405.72 | 12.0% | 351.21 | 397.26 | 13.1% |
| Best Estimate | 362.14 | 418.08 | 15.4% | 351.21 | 409.62 | 16.6% |
| Pessimistic | 362.14 | 429.48 | 18.6% | 351.21 | 421.02 | 19.9% |
Plan Prime - Family
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 763.51 | 853.17 | 11.7% | 740.92 | 835.52 | 12.8% |
| Best Estimate | 763.51 | 879.29 | 15.2% | 740.92 | 861.64 | 16.3% |
| Pessimistic | 763.51 | 903.37 | 18.3% | 740.92 | 885.72 | 19.5% |
MediPrime - Individual
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 295.14 | 350.33 | 18.7% | 286.88 | 343.45 | 19.7% |
| Best Estimate | 295.14 | 356.57 | 20.8% | 286.88 | 349.69 | 21.9% |
| Pessimistic | 295.14 | 362.32 | 22.8% | 286.88 | 355.44 | 23.9% |
MediPrime - Family-1
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 696.50 | 797.77 | 14.5% | 676.60 | 781.70 | 15.5% |
| Best Estimate | 696.50 | 817.79 | 17.4% | 676.60 | 801.72 | 18.5% |
| Pessimistic | 696.50 | 836.20 | 20.1% | 676.60 | 820.13 | 21.2% |
MediPrime - Family-2
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 629.50 | 742.38 | 17.9% | 612.28 | 727.87 | 18.9% |
| Best Estimate | 629.50 | 756.27 | 20.1% | 612.28 | 741.76 | 21.1% |
| Pessimistic | 629.50 | 769.05 | 22.2% | 612.28 | 754.54 | 23.2% |
(1) Represents premium charged by carriers.
(2) Represents cost to a participating agency.
CORE PLUS MEDICAL & PSYCHIATRIC ENHANCEMENTS
Plan Prime - Individual
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 400.0 | 449.03 | 12.3% | 384.89 | 440.54 | 14.5% |
| Best Estimate | 400.0 | 463.67 | 15.9% | 384.89 | 454.90 | 18.2% |
| Pessimistic | 400.0 | 477.35 | 19.3% | 384.89 | 468.86 | 21.8% |
Plan Prime - Family
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 842.38 | 942.06 | 11.8% | 811.41 | 924.33 | 13.9% |
| Best Estimate | 842.38 | 972.85 | 15.5% | 811.41 | 954.55 | 17.6% |
| Pessimistic | 842.38 | 1,001.60 | 18.9% | 811.41 | 983.87 | 21.3% |
MediPrime - Individual
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 307.02 | 363.50 | 18.4% | 297.50 | 356.60 | 19.9% |
| Best Estimate | 307.02 | 370.42 | 20.7% | 297.50 | 363.43 | 22.2% |
| Pessimistic | 307.02 | 376.87 | 22.8% | 297.50 | 369.97 | 24.4% |
MediPrime - Family-1
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 749.40 | 856.51 | 14.3% | 724.05 | 840.39 | 16.1% |
| Best Estimate | 749.40 | 879.61 | 17.4% | 724.05 | 863.11 | 19.2% |
| Pessimistic | 749.40 | 901.12 | 20.2% | 724.05 | 885.00 | 22.2% |
MediPrime - Family-2
| Gross Rates(1) | Gross Rates(1) | Gross Rates(1) | Net Rates(2) | Net Rates(2) | Net Rates(2) | |
|---|---|---|---|---|---|---|
| Optimistic | 656.42 | 770.97 | 17.5% | 636.67 | 756.43 | 18.8% |
| Best Estimate | 656.42 | 786.36 | 19.8% | 636.67 | 771.63 | 21.2% |
| Pessimistic | 656.42 | 800.65 | 22.0% | 636.67 | 786.11 | 23.5% |
(1) Represents premium charged by carriers.
(2) Represents cost to a participating agency.
Exhibit III
EMPIRE PLAN
PA 5 TIER GROUP RATES
1995-2004 Monthly Rates
Core Plus Medical & Psychiatric Enhancement
Individual Planprime
| Year | 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% |
| 2002 | 353.81 | 8.8% | 344.66 | 9.7% |
| 2003 | 400.00 | 13.1% | 384.98 | 11.7% |
| 2004 (Projected) | 463.67 | 15.9% | 454.90 | 18.2% |
Average Percent Increase
| Gross Rate % Change | Net Rate % Change | |
|---|---|---|
| From Inception of 5 Tier Structure (1996) | 9.0% | 10.1% |
Family Planprime
| Year | 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% |
| 2002 | 742.98 | 10.3% | 723.97 | 11.2% |
| 2003 | 842.38 | 13.4% | 811.59 | 12.1% |
| 2004 (Projected) | 972.85 | 15.5% | 954.55 | 17.6% |
Average Percent Increase
| Gross Rate % Change | Net Rate % Change | |
|---|---|---|
| From Inception of 5 Tier Structure (1996) | 8.1% | 9.1% |
Individual Medprime
| Year | 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% |
| 2002 | 259.96 | 5.8% | 253.82 | 5.8% |
| 2003 | 307.02 | 18.1% | 297.52 | 17.2% |
| 2004 (Projected) | 370.42 | 20.7% | 363.43 | 22.2% |
Average Percent Increase
| Gross Rate % Change | Net Rate % Change | |
|---|---|---|
| From Inception of 5 Tier Structure (1996) | 7.3% | 8.7% |
Family - 1 Medprime
| Year | 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% |
| 2002 | 649.14 | 9.1% | 633.13 | 9.5% |
| 2003 | 749.40 | 15.4% | 724.17 | 14.4% |
| 2004 (Projected) | 879.61 | 17.4% | 863.11 | 19.2% |
Average Percent Increase
| Gross Rate % Change | Net Rate % Change | |
|---|---|---|
| From Inception of 5 Tier Structure (1996) | 7.1% | 8.2% |
Family - 2 or More Medprime
| Year | 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% |
| 2002 | 555.29 | 7.9% | 542.29 | 7.9% |
| 2003 | 656.42 | 18.2% | 636.73 | 17.4% |
| 2004 (Projected) | 786.36 | 19.8% | 771.63 | 21.2% |
Average Percent Increase
| Gross Rate % Change | Net Rate % Change | |
|---|---|---|
| From Inception of 5 Tier Structure (1996) | 6.6% | 8.0% |
(1) Represents premiums charged by the carriers.
(2) Represents cost to a participating agency.
(3) Inception of Mediprime Rate Structure.
Exhibit IV
EMPIRE PLAN
PA 2 TIER GROUP RATES
1995-2004 Monthly Rates
(For Illustrative Purposes Only)
Core Plus Medical & Psychiatric Enhancement
Individual
| Year | Gross Rate | % Change | Net Rate | % Change |
|---|---|---|---|---|
| 1995 | 214.70 | 0.4% | 193.54 | -2.0% |
| 1996 (1) | 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% |
| 2002 | 313.58 | 8.4% | 305.67 | 9.1% |
| 2003 | 357.44 | 14.0% | 345.36 | 13.0% |
| 2004 (Projected) | 417.92 | 16.9% | 409.96 | 18.7% |
Average Percent Increase
| Gross Rate % Change | Net Rate % Change | |
|---|---|---|
| From Inception (1986) | 8.4% | 8.5% |
| Most Recent 10 Years | 7.1% | 7.8% |
| Most Recent 5 Years | 11.8% | 13.1% |
Family
| Year | Gross Rate | % Change | Net Rate | % Change |
|---|---|---|---|---|
| 1995 | 486.99 | 0.5% | 440.35 | -1.5% |
| 1996 (1) | 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% |
| 2002 | 703.61 | 9.8% | 685.83 | 10.7% |
| 2003 | 805.64 | 14.5% | 778.82 | 13.6% |
| 2004 (Projected) | 939.20 | 16.6% | 921.60 | 18.3% |
Average Percent Increase
| Gross Rate % Change | Net Rate % Change | |
|---|---|---|
| From Inception (1986) | 8.9% | 9.0% |
| Most Recent 10 Years | 7.0% | 7.7% |
| Most Recent 5 Years | 11.8% | 13.1% |
(1) Represents 2 tier Empire Plan Rates; See 5 tier rate schedule effective 1/1/96.
exhibit I pdf version
exhibit II pdf version
exhibit III pdf version
exhibit IV pdf version