Fwd: [DCSTFI] Rate Action & Open Enrollment

[DCSTFI Information]

We've had an inquiry from one of our members that will require a thoughtful explanation. David has crafted a reply to let her know that we will be responding to her multiple queries soon.

Cheers - Heather

---------- Forwarded message ----------
From: DCSTFI Info <dcstf...@gmail.com>
Date: Tue, May 21, 2013 at 11:33 PM
Subject: Re: [DCSTFI] Rate Action & Open Enrollment
To: Robin Schafer <rscha...@gmail.com>
Cc: "dcstfi....@gmail.com" <dcstfi....@gmail.com>, Todd miller <tami...@miller-shook.com>

Dear Robin,

We have received your message and will reply soon.  Your concerns are important to us, and we would like to consider your points carefully.

However, I would like to address your concern that "...while I have until May 24 for open enrollment decisions, I received an invoice assuming I would continue in the same plan requesting payment due by May 17!"

Please recall that premiums are normally due by the 5th of the preceding month, i.e., you would normally have been invoiced for coverage during the month of June with a payment due date of May 5.  In this particular case, our payment due date for June coverage was delayed to May 17 because of our insurance provider renewal (provider rate changes) and our internal open enrollment preparations (member plan changes).

The May 24 date only reflects that we have scheduled 3 weeks for our members to consider their open enrollment options; During this time, DCSTFI must still pay our insurance provider for our group premiums.  The assumption that everyone will stay in the same plan for June allows us to invoice our members and meet our financial obligation. This actually results in additional work for our bookkeeper, yet the DCSTFI board agreed that this was the most straightforward way to invoice during open enrollment.

We do appreciate the trust our members have placed in the DCSTFI Board.  Please be patient while we address your other points.

Thank you,

W. David Kulp, III

DCSTFI Secretary

On behalf of the DCSTFI Board

On May 21, 2013, at 10:56, Robin Schafer <rscha...@gmail.com> wrote:

Dear Todd and DCSTFI Board,

I am concerned about this explanation for the rate increase in our insurance premiums this year and would appreciate your response to the following,

1) How much of the increase in claims stated in explanation point 1 was due to the 14 claims of $10,000 or more listed in explanation point2? Are these essentially the same point?

2) Even if these 14 claims all came from different individuals they must still represent only a very small proportion of DCSTFI members. I was under the impression that the vast majority of  members' claims never come near to exceeding our premiums. In justifying an increase, information about this end of the spectrum also needs to be reported. What is the total premium to total claims ration? What is the average annual claim to annual contribution (with standard deviations)? This information would provide better justification for an increase in premiums. Note that saying that this year you had to pay out $140,000 more than expected frankly sounds less like an explanation and more as though profits weren't as high as was hoped. Its no explanation at all. 

3) Did the increase in premiums assume that high claims would continue to increase, and at nearly 75%, in the next year? Since we're such a small plan, rather than just make the sorts of  assumptions justified with large, random populations, was an effort made to ascertain whether the same members are placing such claims and whether they expect them to continue? 

4) The point of the ACA 85/15 rule is to reduce administrative costs when they surpass 15% of the overall cost of the plan NOT to raise the cost of the plan in order that excessive administrative costs are tweeked to constitute 15% of premiums. So explanation point 3 is highly questionable. Am I misunderstanding this?

5) I have yet to receive an explanation from the Board or from Todd about what happened to the 3.2% rebate to our plan that we were all informed about by CareFirst BCBS in a letter last summer dated July 10, 2012 and which was reportedly returned to DCSTFI by August 1, 2012. I've e-mail both the Board and Todd asking about this, but have received no answer. This definitely should have entered into any adjustment and should be part of the explanation for the increase --- are we actually realizing an increase of 18% and just being told 14.8%?

6) The statement that the trend you see in annual adjustments is a 12% increase doesn't mesh with our recent experience. Here are my quarterly rates and the changes over the last 5 years:

2008: 901.89

2009: 1034.49    increase of 14.7%

2010:1034.49     no change

2011: 955.47      decrease of 7.6%

2012: 1074.97    increase of 12.5%

If you want to say that *when* you have had to increase rates in recent years, you've increased of 12-14%, then ok. If you had to go back more than 5 years in order to get it to look like this increase is consistent with prior years, then let us know how far back you had to go --- the last 10? the last 15? But when making a statement about recent trends, the years of no change and negative change actually lowers the average adjustment factor. Unless this is more complicated than I think, I've had an average annual increase of about 5% over the last few years, so a 15% jump is a biggie. It really disturbs me to read something that strikes me as bogus in this explanation. Please clarify!

 

Ultimately I trust the Board members to be able to address these concerns, and so am continuing my membership. However, there are aspects of DCSTFI administration that sometimes suggest that the left hand doesn't know what the right hand is doing. For example, while I have until May 24 for open enrollment decisions, I received an invoice assuming I would continue in the same plan requesting payment due by May 17! So it just may be the case that a few details have slipped through the cracks, especially in this May 6 Explanation of Renewal Process.  I am eager to hear your response to my questions and concerns.

Thank you for your service with DCSTFI,

Best,

Robin Schafer

On Tue, May 7, 2013 at 12:26 AM, DCSTFI Information <dcstf...@gmail.com> wrote:

Dear DCSTFI Members,

Please find attached a letter from Todd Miller of Miller & Shook, the insurance representative for DCSTFI;  Todd's letter addresses the rate increase that accompanied our insurance renewal for 2013.

Earlier this year, the DCSTFI Board asked Todd to market our program to investigate if there were better options for insurance coverage for our group before renewing with Carefirst.  Based on the responses from Carefirst and other insurance providers, the Board voted to stay with Carefirst, considering that this was the best option for our members.

Open Enrollment continues through 5:00 PM EDT on 24 May 2013.  If you have not yet elected your coverage for this year, please refer to the package sent last month and follow the instructions therein.  If you did not receive a package for any reason, please alert us by sending email to  dcstf...@gmail.com.

Please direct any questions concerning the details of plan options to Todd at tami...@miller-shook.com. 

Thank you,
W. David Kulp, III
DCSTFI Secretary
On behalf of the DCSTFI Board

--
Robin Schafer

rscha...@gmail.com

301-832-0415