“I THOUGHT THERE WOULD BE NO TAX INCREASES FOR THE MIDDLE CLASS, ONLY TAX INCREASES FOR RICH BASTARDS WHO NEED TO PAY “THEIR FAIR SHARE” – Homer G. Farnsworth, M.D.
By Molly Mulebriar
I am reviewing a BUCA renewal for a +200 life, fully-insured case this morning. The renewal warns that the information contained in the re-rate calculation is CONFIDENTIAL and proprietary in nature. Therefore, I cannot disclose the name of the carrier.
Several things are of interest:
1. Out-of-network reimbursement is based on 105% Medicare for professional care, and 140% Medicare for facility care. This is a change over the prior year – “This change helps in controlling rising health care costs. Our Medicare based coverage generally is leaner than our previous coverage for out-of-network services.” THIS CARRIER IS PAYING JUST ABOUT THE SAME AS COST PLUS PLANS FOR OUT-OF-NETWORK CLAIMS. I WONDER WHAT THE BALANCE BILLING STATISTICS ARE?
2. “Your claim experience and rates are lower due to negotiated savings. The claim experience shown also includes access fees which are a percentage of savings achieved.” IN OTHER WORDS, “YOUR CLAIM DATA INCLUDES FIXED COSTS” – CARRIER NEGOTIATES OFF CHARGE MASTER RATES NO ONE EVER PAYS AND THEN CHARGES A PERCENTAGE OF THE “SAVINGS AS A FEE THAT NEVER SHOWS UP AS A LINE ITEM EXPENSE, BUT IS HIDDEN IN THE CLAIM SIDE OF THE LEDGER
3. State taxes, assessements and/or other charges, reinsurance contribution, health insurance providers fee, and “other adjustment” = 7.5% of premium. I THOUGHT THAT THERE WOULD BE NO TAX INCREASES FOR THE MIDDLE CLASS, ONLY TAX INCREASES ON RICH BASTARDS WHO NEED TO PAY “THEIR FAIR SHARE”
4. Target loss ratio of 80% is divided into expected claims MINIMUM LOSS RATIO REQUIREMENT DRIVES UP CARRIER PROFITS – 15 OR 20% ALLOWABLE RETENTION OF A LARGER NUMBER IS LARGER THAN 15 OR 20% OF A LOWER NUMBER
5. Trend is 9,85% health, 10.50 Rx PROOF THAT PPO CONTRACTS DRIVE COSTS UP YEAR AFTER YEAR THROUGH AUTOMATIC ESCALATOR CLAUSE.
6. Additional fees of $5 pmpm for “the coverage of Hepatitis-C treatments, including Sovaldi.”
This case is getting a +20% renewal increase. 7.5% of the increase is politically driven through mandated taxes. The rest of the increase is partially due to the MLR mandate, also a politically driven cost factor. Try explaining that to the masses.
ALL THIS MAKES A GOOD CASE WHY PLAN SPONSORS SHOULD CONSIDER SELF-FUNDING
