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1. Objective
2. Assumptions
a.
Effective Date:
h.
Benefit Changes:
0.0%
(Prospective adjustment)
b.
Experience:
0.0%
(Adj. to experience period 1)
0.0%
(Adj to experience period 2)
c.
Enrollment:
i.
Rx Management Savings:
($433,000)
d.
Current Enrollment:
2,701
Chronic Load:
$0
e.
Rx Trend:
10.0%
j.
Claim Fluctuation Margin:
0.0%
3.
Algorithm
Experience Period 1
Experience Period 2
a.
Paid Claims Period:
7/2015 - 6/2016
7/2014 - 6/2015
b.
Approximate Incurred Claims Period:
6/2015 - 5/2016
6/2014 - 5/2015
c.
Midpoint of Experience Period:
12/1/2015
12/1/2014
d.
Midpoint of Projection Period:
7/1/2017
7/1/2017
e.
Months of Trend:
19
31
f.
Average Subscribers:
2,718
2,749
g.
Pharmacy Paid Claims:
$7,054,948
$6,238,800
h.
Pooled Claims:
$0
$0
i.
Adjusted Paid Claims (g less h):
$7,054,948
$6,238,800
j.
Change in Reserve (Lagged Claims):
1.000
1.000
k.
Network Change:
1.000
1.000
l.
Adjusted Paid Claims (i x j x k):
$7,054,948
$6,238,800
m.
Trend Adjustment Factor:
1.163
1.279
n.
Trended Adjusted Paid Claims (l x m):
$8,204,125
$7,980,538
o.
Add in Individual Claims to Pooled Level:
$0
$0
p.
Plan Change Adjustment Factor (See Assumption h):
1.000
1.000
q.
Enrollment Change Adjustment Factor:
0.994
0.982
r.
Chronic Health Conditions Adjustment and Other $ Adjustments:
($433,000)
($433,000)
s.
Projected Experience Paid Claims [(n + o) x p x q + r]:
$7,720,061
$7,407,715
t.
Claim Fluctuation Margin:
1.00
1.00
u.
Projected Experience Paid Claims with Margin (s x t):
$7,720,061
$7,407,715
v.
Claim Rate:
PEPM:
$238.19
$228.55
Total Monthly:
$643,338
$617,310
Total Annual:
$7,720,061
$7,407,715
Credibility:
80%
20%
Blended Rate (PEPM):
Lagged one month
$236.26
ABC Company
Medical and Pharmacy Funding Rate Projection For a January 1, 2017 Effective Date
—
Pharmacy Claims Projection —
Develop funding rates which cover all pharmacy paid claims and associated administrative expenses for the plan year beginning January 1, 2017.
January 1, 2017
Per UnitedHealthcare and Express Scripts
experience reports