- HMO Commercial Premium Rate
Survey
- Key Findings
MCOL has just
completed it third annual California HMO commercial premium rate survey,
compiling a database representing 18,009 sets of premium rates in effect for
2001, that is the centerpiece of its just released CA HMO Rate 2001 suite of
premium rate data and tools. The database provides 2001 premium rates for
California HMOs on a by-plan, by-county, by-group-size, by-benefit-level,
by-age-group, by-premium tier basis. Five key trends were identified in analysis
of the 2001 commercial premium rate data:
- Small
employers bear the burden of premium increases
- California
small employers averaged a 19.99% premium increase for 2001, compared to
17.12% in 2000. However, individual policies, mid-size groups and large
groups all averaged single digit increases for 2001. Mid size group
increases averaged 4.54%, large groups increases averaged 7.27% and
individual policies averaged 8.95% increases. Furthermore, individual and
mid-size group increases dropped this year from double digit increases in
2000.
-
- California
Health Plans are targeting mid-size employers
- Not
only did mid-size groups average lower increases than other size groups,
their actual average premium rates averaged lower than large groups in many
categories. For example, the average non-age rated single premium for high
benefit level plans for mid-sized groups was $150.74 compared to $155.01 for
large groups. Some reasons for this pricing phenomenon include:
a) mid-size groups involved in the survey tended to have more single
plan offerings as opposed to multi-plan large group open enrollment
offerings, where underwriting risk can be higher; b) more aggressive pricing
for 2001 premium rates were observed in the mid-size market, as plans sought
to capture market share from this group- given that large groups tend to
have a longer time frame for decisions regarding switching health plans, the
mid size market provides a more immediate sector in which market gains can
be made; and c) as many plans during the past year have emphasized improved
margins over enrollment gains, the mid-size market can provide the means to
more selectively obtain new books of business that meet plans’ desired
financial objectives in a more controlled marketing environment.
-
- The
Individual market is being viewed favorably by a number of plans
- Not
only were premium increases for individual policies lower than the small
group market, but their actual average premium rates were lower than small
group average premiums for some categories. An explanation lies in the fact
that the individual market is not subject to guaranteed issue, and has
strict underwriting, while in contrast, the group market has guaranteed
issue, and negligible underwriting. However,
not as many plans offer individual policies as small group products, and
this factor contributes to the difference between individual and small group
rates as well.
-
- Statewide
plans are taking very different premium pricing approaches
- Statewide
HMOs demonstrate a different rating strategy and market position for non-age
vs. age rated rates.
While some plans are consistent in their marketplace position
regarding premium pricing between non-aged and age rated premiums, other
plans experience very different market positions for these two components.
Furthermore, of the statewide plans, Blue Cross, Cigna, HealthNet,
and PacifiCare all experienced single digit premium increases, while Aetna,
Blue Shield, and Kaiser all experienced double digit increases for 2001. In
comparison to 2000/1999 premium increases for statewide plans, Blue Shield,
HealthNet, and PacifiCare all experienced similar rating increases compared
to 2000 while Aetna, Blue Cross, Cigna, and Kaiser experienced more
significant changes in their premium increases between the two years.
-
- The
variance in premium pricing by location has widened
- The nine highest priced counties for HMO premiums were all
rural Northern California counties, except for Monterey (which was the
highest priced county.). Conversely, the nine lowest priced counties were
all located in Southern California. The pricing differential between
counties was more pronounced in 2001. Using Sacramento County as a base, in
2000, the range averaged from 22.7% higher than Sacramento to 10.7% lower.
In 2001, the range was from 36.9% higher than Sacramento to 7.9% lower.
Return to CA HMO Rate 2001 Main Page
|
MCOL
positioning you for a new kind of healthcare |
| E
Mail: mcare@mcol.com |
Phone:
209.577.4888 |
Fax:
209.577.3557 |
| Write:
MCOL 1101 Standiford Ave., Suite C-3, Modesto, CA 95350 |
© Copyright 2003,MCOL. All rights
reserved.
