october 2006 n.
Skip this Video
Download Presentation
Florida Health Insurance Plan High Risk Pool

Loading in 2 Seconds...

play fullscreen
1 / 26

Florida Health Insurance Plan High Risk Pool - PowerPoint PPT Presentation

  • Uploaded on

Mercer Oliver Wyman Actuarial Consulting, Inc. October 2006. Florida Health Insurance Plan High Risk Pool. Karen Bender Milwaukee. Florida Health Insurance Plan (FHIP). 2003 Legislation – start a new high risk program

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Florida Health Insurance Plan High Risk Pool' - tomas

Download Now An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
october 2006

Mercer Oliver Wyman

Actuarial Consulting, Inc.

October 2006

Florida Health Insurance PlanHigh Risk Pool

Karen Bender


florida health insurance plan fhip
Florida Health Insurance Plan (FHIP)
  • 2003 Legislation – start a new high risk program
  • Engaged Mercer Oliver Wyman U.S. Actuarial Consulting (MOW) to perform feasibility study
  • One aspect of the feasibility study was to analyze the impact the high risk pool will have on the market (if any)

Florida Comprehensive Health Association (FCHA)

  • Formerly known as State Comprehensive Health Association
  • High Risk Pool
  • Closed to new enrollment in October 1990
  • 1990 Data
    • Premium $15 million
    • Claims $47 million
    • Assessment $34 million

Unique Circumstances in Florida that

Facilitated Impact Analysis

  • HIPAA Requirements
  • Florida DOI issued data request
  • Florida requires rates be filed and approved before using
  • Florida has certain routine reporting requirements
florida hipaa compliance
Florida HIPAA Compliance

3 Prong Approach

Small Group






florida hipaa compliance1
Florida HIPAA Compliance
  • Carriers in Individual (Nongroup) Market
    • Applicable only to HIPAA-qualified Individuals leaving Self-funded Plans
    • Must guarantee issue their two most popular currently marketed plans
florida hipaa compliance2
Florida HIPAA Compliance
  • Small Group Carriers
    • Required to guarantee issue to self-employed each August
    • Premiums cannot exceed 150% of Standard Risk Rates
    • DOI determines Standard Risk Rates
      • Based upon average rate charged by nongroup carriers representing 80% of the nongroup market
florida hipaa compliance3
Florida HIPAA Compliance
  • Group Carriers
    • Must issue conversion contracts
    • Benefits determined by Florida regulators
    • Premiums cannot exceed 200% of Standard Risk Rates
    • Same Standard Risk Rates (adj. for benefits) as used for G.I. for one-life groups by small group carriers
florida hipaa compliance4
Florida HIPAA Compliance
  • Individual Carriers
  • Small Group Carriers
  • Group Carriers

High Risk Pool Would Eliminate These HIPAA Compliance Requirements

  • What will impact be on rates (if any)?
florida doi data request
Florida DOI Data Request
  • Issued to Individual (Nongroup) and Small Group Carriers
    • Experience for one-life and HIPAA-qualified individuals vs. small group and medically underwritten groups
    • Impact of removing several requirements
    • 19 carriers (including HMOs) participated
  • Segregated by HIPAA Compliance
    • Individual Carriers
    • Small Group Carriers
    • Group Carriers
  • Impact Segregated between Claim Cost and Administrative Costs
  • HIPAA Experience for Individual Carriers
  • HIPAA Experience for Individual Carriers

Nongroup Carrier Losses Attributable to HIPAA

hipaa experience for individual carriers
HIPAA Experience for Individual Carriers
  • Losses as a % of 2003 Premium
    • Range 1.2% to 2.2%
    • Carriers will still incur losses on existing HIPAA individuals unless they would be allowed to immediately transfer them to the high risk pool
    • Over long run, premiums decrease 1.2% to 2.2%
  • Responses from Carriers

If we ignore the carriers that did not provide an estimate, the weighted

average (based upon lives) is about a 3% reduction in nongroup premiums.

individual carrier responses
Individual Carrier Responses
  • Administrative Savings
    • Carriers indicated would be minimal, 0.0% to 0.5% of premium
    • Appeared conservative
    • MOW estimated 1.0% savings
small group carriers
Small Group Carriers
  • GI One-Life Groups Experience vs. Groups 2-50 EEs
small group carriers1
Small Group Carriers
  • Incurred Losses Attributable to One-Life Groups

Reason losses decreased in 2003, companies allowed to increase rates from

115% to 150% of Standard Risk Rates

small group carriers2
Small Group Carriers
  • One-Life Groups
    • Losses on previous slide understated
      • Expressed as a % of 2003 Premium Levels for technical reasons
      • Removing GI for one-life group could reduce small group premiums by 2.0% to 3.0% in the long run
small group carriers3
Small Group Carriers
  • Responses from Carriers
    • Mixed
    • 9 carriers indicated no change in premiums if G.I. of one-life groups removed
    • Several indicated they could not determine impact
    • Some carriers indicated they had insufficient membership to generate credible results
    • Missed opportunity
small group carriers4
Small Group Carriers
  • Administrative Savings
    • Elimination of open enrollment
    • Reduced marketing costs resulting from elimination of open enrollment forms, etc.
    • More streamlined regulatory reporting requirements
    • Higher administrative costs associated with billing, accounting, customer service of one-life groups
small group carriers5
Small Group Carriers
  • Administrative Savings
    • Carrier’s responses mixed; no numerical estimates
    • MOW estimated 1% premium savings in the long run
group carriers
Group Carriers
  • Current HIPAA Compliance Requirement
    • Conversion Plans
    • State defined benefits
    • 200% Standard Risk Rate
  • Florida DOI has 2002 Group Conversions Statistics:
    • Actual loss ratio for 8 largest insurance companies – 211%
    • $58.4 million losses (Assumes 85% breakdown loss ratio)
    • Losses represent 0.5% of group premium
group carriers1
Group Carriers

Potential Premium Savings

*The reason that Elimination of Group Conversion (0.5% of premium) has what appears to be a greater

dollar amount of impact proportionally than the elimination of one-life groups is that elimination of group

conversion impacts the premium for all fully insured group sizes, whereas the elimination of one-life

groups impacts the premium for only small groups.

  • Impact on Previous Slide
    • Does not consider impact of assessments
    • Critical to create broadest base possible for assessments
      • Self-funded
      • Provider
    • Small base for assessments could negate savings
fhip analysis
FHIP Analysis
  • Most comprehensive impact analysis MOW has observed
  • Sources of data critical
  • Legislation failed
    • Critical issue was funding