2020 CCOGA POOL RENEWAL Small Group Meeting August 7, 2019 CCOGA - PowerPoint PPT Presentation

2020 CCOGA POOL RENEWAL Small Group Meeting August 7, 2019

CCOGA Pool Governance and Management I. SWWC Joint Powers Board of Directors II. CCOGA Pool Advisory Committee • Darin Balken – Prairie Lakes Youth Programs - Director • Rollie Neilson – Kandiyohi County - Commissioner • Susan Skattum – Rock County - Assistant County Administrator • Sharon Hansen – City of Marshall - City Administrator • Stacy Knott – Renville County – Labor Representative • Crystal Johnson – City of Granite Falls - City Administrator III. SWWC Pool Management Staff • Doug Deragisch – Senior Director of Administrative Services • Mari Wagner – Insurance Specialist • Kari Bailey – Regional Wellness Specialist • Bobbie Carmody – Administrative Assistant IV. BCBS Client Executive – Geoff Martinson

What is Expected Through Increased Statewide Collaboration and Rating Methodologies? 1) Reduce Premium Volatility 2) Reduce the Rate of Healthcare Premium Inflation 3) Develop and Implement Statewide Best Practices 4) Reduce Regional Redundancy and Expense of Third Party Administration

2017 Needed Increases (Prior to MHC) 700.0% 600.0% 500.0% 400.0% 300.0% 200.0% 100.0% 0.0% -100.0% 4

2018 Needed Increases (Year 1 of MHC) 700.0% 600.0% 500.0% 400.0% 300.0% 200.0% 100.0% 0.0% -100.0%

2019 Needed Increase (Year 2 of MHC) 700.0% 600.0% 500.0% 400.0% 300.0% 200.0% 100.0% 0.0% -100.0% 6

2020 Needed Increase (Year 3 of MHC) 700.0% 600.0% 500.0% 400.0% 300.0% 200.0% 100.0% 0.0% -100.0% 7

CCOGA Pool by Groups 2020 2019 100+ 51-99 11-50 2-10 100+ 51-99 11-50 2-10 2018 2017 100+ 51-99 11-50 2-10 100+ 51-99 11-50 2-10 8

MHC Pool by Groups 22% 12% 65% 100+ 51-99 1-50 9

CCOGA Pool by Contracts 2019 2020 100+ 51-99 11-50 2-10 100+ 51-99 11-50 2-10 2018 2017 100+ 51-99 11-50 2-10 100+ 51-99 11-50 2-10 10

MHC Pool by Contracts 14% 15% 71% 100+ 51-99 1-50 11

CCOGA Pool by Total Current Premium $1,527,096 $5,526,666 $15,237,342 $7,212,864 100+ 51-99 11-50 2-10 12

SWWC CCOGA Renewal Plans and Contracts Large Groups 250 223 200 179 167 150 114 97 100 78 49 47 50 37 31 30 26 20 14 4 3 2 2 2 1 1 1 1 1 1 1 1 1 0 $0 $100 $400 $500 $1,200 $1,500 $1,850 $2,250 $2,500 $2,600 $2,800 $3,500 $5,000 $6,350 Percentage of contracts $1000 or less: 12% # Groups # Contracts 13

SWWC CCOGA Renewal Plans and Contracts Medium Groups 300 255 250 200 150 100 70 49 39 37 35 50 32 28 23 15 12 7 3 2 2 2 2 1 1 1 1 1 1 0 0 $1,850 $2,000 $2,250 $2,600 $2,800 $3,375 $3,500 $5,000 $6,350 $6,650 $6,750 $6,900 # Groups # Contracts Percentage of contracts $1000 or less: 0% 14

SWWC CCOGA Renewal Plans and Contracts Small Groups 119 120 100 80 60 53 49 40 34 32 31 26 25 24 22 22 19 20 12 9 8 8 6 5 5 4 3 3 2 2 2 2 2 2 2 2 2 1 1 1 1 0 0 $0 $300 $500 $750 $1,000 $1,200 $1,400 $1,500 $1,850 $2,000 $2,250 $2,350 $2,500 $2,800 $3,375 $3,500 $5,000 $6,650 Percentage of contracts $1000 or less: 28% # Groups # Contracts 15

JPA Board Approved 2020 Formula 100+ Contracts MIN -7.5% to MAX 8.5% (-2% between MIN/MAX) 1 Paying More; 5 Paying Less; 1 NA 51-99 Contracts MIN -5.0% to MAX of 9.5% (-1.5% between MIN/MAX) 2 Paying More; 6 Paying Less 11-50 Contracts MIN 0.0% to MAX of 13.5% (-1% between MIN/MAX) 5 Paying More; 10 Paying Less 2-10 Contracts MIN 3.5% to MAX of 17% (-1% between MIN/MAX) 14 Paying More; 14 Paying Less 16

2020 CCOGA Renewal Needed vs. Formula Applied Small Groups 110.0% 90.0% 70.0% 50.0% 30.0% 10.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 -10.0% -30.0% Needed Formula 17

Formula History 2020 2019 2018 2017* MIN MAX MIN MAX MIN MAX MIN MAX 100+ -7.5% 8.5% 0.0% 15.0% -5.0% 19.0% 1.0% 19.5% 51-99 -5.0% 9.5% 2.5% 19.0% 0.0% 29.0% 3.5% 24.5% 11-50 0.0% 13.5% 4.0% 25.0% 2.5% 38.0% 6.0% 29.5% 2-10 3.5% 17.0% 6.0% 28.0% 6.0% 43.0% * Last year of old rating methodology & we didn't differentiate groups under 51 18

SWWC Small Group ‘Level Rating’ Concept To reduce the year-to-year rate fluctuation a concept has emerged to provide the entire small group with the • same rate increase. Example: • This year the current premium of all groups with 50 or less contracts was $7,053,762 • The total needed income for 2020 is $7,642,209 • This is an 8.3% needed premium increase. • The ‘Level Rating’ for 2020 would apply a 7.8% with a needed of 8.3% increase to all groups regardless of what • they calculated. MIN 0% MAX 13.5% and MIN 3.5% MAX 17% • This would be used ongoing to help with the rate fluctuation from year-to-year but will evaluate the increase • based on yearly needed increase minus any Pool subsidy applied. In 2019 it would have been: 12.6% with a needed of 15.9% • MIN 4% MAX 25% and MIN 6% MAX 28% • In 2018 it would have been: 14.9% with a needed of 20.8% • MIN 2.5% MAX 38% and MIN 6% MAX 43% • In this model there will be NO individual renewal booklets. Data will only be reported as an aggregate. • Could possibly lead to a MHC statewide level rating methodology or even a limited number of common plans? • 19

2020 CCOGA Renewal With Use of 'Level Rating' 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 -20.0% -40.0% Needed Level Rates 20

SWWC Small Group ‘Level Rating’ Concept Thoughts/Questions/Concerns? 21