HomeMy WebLinkAboutMINUTES - 08231988 - 1.4 (2) 1--( T9
TO BOARD OF SUPERVISORS
FROM; Cio 1ti a
Mark Finucane
Health Services Director Costa
DATE . August 16 , 1988 County
SUBJECT; Approval of Rates for the Contra Costa Health Plan.
Contracts for 19£ 8-89 and Authorization to use basic
Cnmm»nty Rating .
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
I RECOMMENDED ACTION
--------------------
Adopt the actuarily determined revenue requirement per
member per month shown on the attached schedule of
premium rates .
Authorize the Executive Director, Contra Costa Health
Plan, to increase the revenue requirement on a quarterly
basis as appropriate by an amount not to exceed 3%
(three percent) per quarter.
Authorize the Executive Director, Contra Costa Health
Plan, to use the Board approved revenue requirement to
develop and establish specific premium rates required by
commercial groups and individuals. Included will be
two- , three- and four-tier basic community rates ,
composite rates , and rates for commercial members with
Medicare coverage. Small group and individual rates
will include administrative loading factors to c'ove'r the
higher administrative costs of handling small contracts.
Premium rates will also be affected by the level of
benefits in each package.
Authorize the Executive Director, Contra Costa Health
Plan, to utilize the community rating .by class ( "CRC" )
rate determination process for groups with 20 or more
employees . Rating factors which may be used include
age/sex, family size, industry and smoking/non-smoking
ratios .
II FINANCIAL IMPACT
-------------------
Gross premium revenue is expected to increase. The
level of the net revenue increase will vary depending
upon enrollment and service utilization in the affected
groups .
CONTINUED ON ATTACHMENT: X YES SIGNATURE;
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON AUL 2 APPROVED AS RECOMMENDED /t OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS (ABSENT 1 AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES. AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THEDATE SHOWN.
cc: County Administrator ATTESTED AU( 2 3 1988
Health Services Director PHIL BATCHELOR, CLERK OF THE BOARD OF
Auditor-Controller SUPERVISORS AND COUNTY ADMINISTRATOR
Contra Costa Health Plan
Health Services Contracts and Grants
M382/7-83 BY �' /� DEPUTY
III REASON FOR RECOMMENDATIONS/BACKGROUND
-----------------------------------------
The Contra Costa Health Plan, as do all Federally
Qualified HMOs , bases its premium rates on a basic
revenue requirement per member per month. The revenue
requirement is used as the base for premium rate
development, and adjusted for membership mix, family
size and the anticipated impact of competition. The
revenue requirement as well as the adjustment factors
are developed by contracted actuaries to ensure
accuracy.
The proposed revenue requirement represents an increase
of 6 . 1% over the revenue requirement for Fiscal Year
1987-88 . This rate of increase compares favorably
with the 6•. 6% increase in the Bay Area Health Care CPI ,
and with the anticipated increases of over 10% among
other Bay Area health care insurers .
Through the recommended action, the Board adopts the
revenue requirement rate of $69 . 22 referenced above.
The Board also authorizes the Executive Director,
Contra Costa Health Plan, to increase the basic revenue
requirement no more than 3% (three percent) a quarter
in developing the various premium rates required by
groups and individuals .
IV CONSEQUENCES OF NEGATIVE ACTION
----------------------------------
The Plan should communicate the new rates to its
contracted employer groups as soon as possible.
Appropriate revenues will not be available to match
actuarially determined expenses if the Board of
Supervisors ' action is negative.
1&3 :BO3&4
RTH: smp
ccs : Health Services Director
CCHP, Atn. Rich Harrison