Agenda Item 7a, Page 1 of 27 Preliminary 2021 Health Rates Pension & Health Benefits Committee Agenda Item 7A Marta Green Chief, Health Plan Research and Administration Division June 16, 2020
Health Plan Rate Development Agenda Item 7a, Page 2 of 27 Agenda • Rate Development Process Improvements • Health Care Fund (HCF) Reserve Policy Adjustment HEALTH CARE • COVID-19 Impact and Administrative Services Fee AFFORDABILITY (ASF) Adjustments Transform Health Care • Preliminary Statewide Weighted Average Premium Purchasing and Delivery to Achieve Change Affordability • Preliminary Premiums for HMO Plans • Preliminary Premiums for PPO Plans • Next Steps
Health Plan Rate Development Agenda Item 7a, Page 3 of 27 Rate Development Process (RDP) Changes Improved Post Submission Health Care CalPERS Projection Standardization Discussions and Fund (HCF) of Baseline Trends of Medical Rating Rate Negotiations Reserve Policy and Assumptions Methodology beginning in Adjustment February
Health Plan Rate Development Agenda Item 7a, Page 4 of 27 HCF Reserve Policy Premium Adjustment September 2018 June 2020 2021 RDP Reserve Board Approved Policy Premium HCF Reserve Adjustment Policy
Health Plan Rate Development Agenda Item 7a, Page 5 of 27 COVID-19 Impact and ASF Adjustments HEALTH CARE AFFORDABILITY Transform Health Care Purchasing and Delivery to Achieve Affordability
Health Plan Rate Development Agenda Item 7a, Page 6 of 27 Preliminary Statewide Weighted Average Premium Percent Change from 2020 Preliminary Premium Change Program Type (with HCF Adj.) Transform Health Care Basic HMO 4.57% Purchasing and Basic PPO 8.54% Delivery to Achieve Affordability Medicare HMO -4.43% Medicare PPO -0.65% Total Program 4.41% *This table includes the benefit enhancements & excludes associations.
Agenda Item 7a, Page 7 of 27 Preliminary Premiums HMO Plans
Health Plan Rate Development Agenda Item 7a, Page 8 of 27 Anthem HMO Select (Basic) Preliminary Premium Change (Without HCF Adjustment) Preliminary Overall Total Published 2020 2021 PSPM Overall Change Change in Covered PSPM without HCF in Premium (%) Premium ($) Lives (TCL) Adjustment 2020 – 2021 Cost Drivers $787.79 $800.55 $12.76 1.62% 43,478 10% 5.56% 2020 Open Enrollment Impact Combined 2.32% Change in Change in Open 1.62% 2019 Risk 2020 Risk 0.80% -7.24% Risk (%) Geo Mix (%) Enrollment 0.27% Impact (%) 0% 0.8065 0.8515 5.58% -4.87% 0.44% HCF Reserve Policy Analysis and Proposed Adjustments -10% HCF Estimated Preliminary Recommended Preliminary 2021 2020 Over Medical Trend Pharmacy Other COVID Total Surplus/ (Deficit) 2021 PSPM Projection Portion of HCF Total HCF PSPM Change as of Dec 2019 with HCF Applied to Adjustment with HCF updated thru Adjustment 2021 Premium Adjustment (%) March 2020 ($) ($6,855,433) 0% $0 $800.55 1.62%
Health Plan Rate Development Agenda Item 7a, Page 9 of 27 Anthem HMO Traditional (Basic) Preliminary Premium Change (Without HCF Adjustment) Preliminary Overall Total Published 2020 2021 PSPM Overall Change Change in Covered PSPM without HCF in Premium (%) Premium ($) Lives (TCL) Adjustment 2020 – 2021 Cost Drivers $1,115.75 $1,322.91 $207.16 18.57% 14,165 20% 18.57% 2020 Open Enrollment Impact Combined Change in Change in Open 2019 Risk 2020 Risk Risk (%) Geo Mix (%) Enrollment 9.37% 10% 8.86% Impact (%) 1.2002 1.2103 0.84% -0.44% 0.40% 6.06% 1.81% 1.67% 0.17% HCF Reserve Policy Analysis and Proposed Adjustments 0% HCF Estimated 2020 Under Medical Pharmacy Other COVID Total Premium Recommended Preliminary Preliminary 2021 Projection Trend Change with Surplus/ (Deficit) Portion of HCF Total HCF 2021 PSPM PSPM Change HCF as of Dec 2019 Adjustment Applied to Adjustment with HCF with HCF updated thru 2021 Premium Adjustment ($) Adjustment (%) March 2020 $17,972,101 80% $14,377,681 $1,220.32 9.37%
Health Plan Rate Development Agenda Item 7a, Page 10 of 27 Blue Shield Access+ (Basic) Preliminary Premium Change (Without HCF Adjustment) Preliminary Total Published 2020 2021 PSPM Overall Change Overall Change Covered PSPM without HCF in Premium ($) in Premium (%) Lives (TCL) Adjustment 2020 – 2021 Cost Drivers $910.16 $982.61 $72.45 7.96% 94,835 10% 2020 Open Enrollment Impact 7.96% Combined Change in Change in Open 2019 Risk 2020 Risk Risk (%) Geo Mix (%) Enrollment Impact (%) 3.50% 3.16% 2.81% 2.16% 1.1585 1.2226 5.53% 0.09% 5.63% 0.12% 0.00% -0.63% 0% HCF Reserve Policy Analysis and Proposed Adjustments 2020 Over Medical Population Pharmacy Other COVID Total Premium Projection Trend Risk Change with HCF Estimated Preliminary Recommended Preliminary 2021 HCF Surplus/ (Deficit) 2021 PSPM Adjustment Portion of HCF Total HCF PSPM Change as of Dec 2019 with HCF Applied to 2021 Adjustment with HCF updated thru Adjustment Premium Adjustment (%) March 2020 ($) $54,841,659 70% $38,389,161 $938.96 3.16%
Health Plan Rate Development Agenda Item 7a, Page 11 of 27 Blue Shield Trio (Basic) Preliminary Premium Change (Without HCF Adjustment) Preliminary Total Published 2020 2021 PSPM Overall Change Overall Change Covered PSPM without HCF in Premium ($) in Premium (%) Lives (TCL) 2020 – 2021 Cost Drivers Adjustment 10% $701.06 $722.56 $21.50 3.07% 8,336 2020 Open Enrollment Impact Combined Change in Change in Open 2019 Risk 2020 Risk 3.07% Risk (%) Geo Mix (%) Enrollment 2.71% Impact (%) N/A 0.9284 N/A N/A N/A 0.85% 0.31% 0.12% 0.00% 0% -0.02% -0.90% HCF Reserve Policy Analysis and Proposed Adjustments Trio is a new plan, effective January 01, 2020. As a result, it is too early 2020 Over Medical Population Pharmacy Other COVID Expansion Total Projection Trend Risk to measure the HCF balance.
Health Plan Rate Development Agenda Item 7a, Page 12 of 27 Health Net Salud y Más (Basic) Preliminary Premium Change (Without HCF Adjustment) Preliminary Total Published 2020 2021 PSPM Overall Change Overall Change Covered 2020 – 2021 Cost Drivers PSPM without HCF in Premium ($) in Premium (%) Lives (TCL) Adjustment 10% $403.55 $425.02 $21.47 5.32% 10,790 2020 Open Enrollment Impact 5.32% Combined 3.71% 3.22% Change in Change in Open 2019 Risk 2020 Risk 1.88% Risk (%) Geo Mix (%) Enrollment Impact (%) 0.20% -0.07% -3.60% 0.5228 0.5372 2.75% -0.21% 2.54% 0% HCF Reserve Policy Analysis and Proposed Adjustments 2020 Over Medical Population Pharmacy Other COVID Total HCF Estimated Recommended Preliminary Preliminary Projection Trend Risk Surplus/ (Deficit) Portion of HCF Total HCF 2021 PSPM with 2021 PSPM as of Dec 2019 Applied to Adjustment HCF Adjustment Change with HCF updated thru 2021 Premium ($) Adjustment (%) March 2020 $3,564,625 0% $0 $425.02 5.32%
Health Plan Rate Development Agenda Item 7a, Page 13 of 27 Health Net SmartCare (Basic) Preliminary Premium Change (Without HCF Adjustment) Preliminary Overall Total Published 2020 2021 PSPM Overall Change Change in Covered 2020 – 2021 Cost Drivers PSPM without HCF in Premium (%) Premium ($) Lives (TCL) Adjustment 9.88% 10% $860.96 $946.01 $85.05 9.88% 18,213 7.36% 2020 Open Enrollment Impact 6.03% Combined Change in Change in Open 2019 Risk 2020 Risk Risk (%) Geo Mix (%) Enrollment 2.43% Impact (%) 1.30% 0.9760 1.0693 9.56% -1.80 7.59% 0.33% 0.10% -0.31% 0% 2020 Over Medical Population Pharmacy Other COVID Total Premium HCF Reserve Policy Analysis and Proposed Adjustments Projection Trend Risk Change with HCF HCF Estimated Preliminary Recommended Preliminary Adjustment Surplus/ (Deficit) 2021 PSPM Portion of HCF Total HCF 2021 PSPM as of Dec 2019 Change with Applied to Adjustment with HCF updated thru HCF Adjustment 2021 Premium Adjustment ($) March 2020 (%) $4,548,786 80% $3,639,029 $924.36 7.36%
Health Plan Rate Development Agenda Item 7a, Page 14 of 27 Kaiser Permanente (Basic) Preliminary Premium Change Total 2021 Kaiser Premiums Relative to other HMO Published 2020 Preliminary Overall Change Overall Change Covered PSPM 2021 PSPM in Premium ($) in Premium (%) Plan Premiums (Basic Plans) Lives (TCL) $730.05 $761.62 $31.57 4.32% 548,287 Kasier $1,220.32 2020 Open Enrollment Impact $938.96 $924.36 Combined $800.55 $722.56 $765.52 $632.94 Change in Change in Open 2019 Risk 2020 Risk Risk (%) Geo Mix (%) Enrollment Impact (%) 1.0201 1.0152 -0.48% 0.03% -0.45% HCF Reserve Policy Analysis and Proposed Adjustments Kaiser Permanente is a fully insured plan, therefore there is no opportunity to accrue a HCF balance.
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