RD300 - The Financial Impact of Mandated Health Insurance Benefits and Providers Pursuant to Section 38.2-3419.1 of the Code of Virginia: 2012 Reporting Period
Section 38.2-3419.1 of the Code of Virginia and the State Corporation Commission's "Rules Governing the Reporting of Cost and Utilization Data Relating to Mandated Benefits and Mandated Providers" (14VAC5-190-10 et seq.) require every insurer, health services plan, and health maintenance organization (HMO) from which a report is deemed necessary to report to the State Corporation Commission (Commission) cost and utilization information for each of the mandated benefits and mandated providers identified in §§ 38.2-3408 through 38.2-3419, and § 38.2-4221 of the Code of Virginia. The Commission is required to prepare a consolidation of these reports, as represented by this document, for submission to the Governor and the General Assembly. This document constitutes the Commission's report for the 2012 calendar year reporting period.
Of the 781 companies licensed to issue accident and sickness or subscription contracts in Virginia or licensed as HMOs in Virginia in 2012, only 28 companies filed credible full reports (18 insurers and 10 HMOs) for the 2012 reporting period. Of the 18 insurers, 2 issued only individual contracts, 10 issued only group certificates or subscription contracts, and 6 issued both individual contracts and group certificates or subscription contracts. This report reflects data provided by 18 insurers representing 50.29% of the Virginia accident and sickness insurance market and 562,198 units of coverage (single and family individual contracts and group certificates) subject to Virginia's mandated benefit and provider requirements. The data of 10 HMOs, representing an additional 28.69% of the Virginia accident and sickness market and 450,338 units of coverage, was also used in the preparation of this report. Because HMOs are not subject to all of the mandated benefit requirements of Title 38.2 of the Code of Virginia and are regulated by the Commission's Rules Governing Health Maintenance Organizations (14VAC5-211-10 et seq.) with regard to the services they must provide, the data reported by HMOs has been analyzed separately from data reported by insurers and health services plans.
To assess the impact of mandated benefits, offers and providers on premiums applicable to individual contracts and group certificates, the Commission required companies to report the total annual premium that would be charged for what is considered to be a standard individual health insurance contract and/or group certificate in Virginia. The total annual premium is reported, per unit of coverage, for individual contracts and group certificates, including single and family coverage.
The figures displayed in this report illustrate, on average, a percentage of the annual premium attributable to each mandated benefit, offer and provider, for both individual and group business as reported by insurers and health services plans for a standard health insurance contract issued in Virginia. The information appearing in Tables 1, 2, 3, and 4 is useful in assessing that percentage of overall average premium for a standard health insurance contract or certificate that is associated with specific mandated benefits, offers and providers.
In addition to premium information, companies reported their claim experience for each mandated benefit, offer and provider for calendar year 2012. The following summary illustrates the average claim cost per contract or certificate and the average percentage of total claims that this cost represents for all mandated benefits, offers and providers taken collectively. Refer to Tables 5 and 6 for the average claim cost per contract or certificate, and the average percentage of total claims that this cost represents for each specific mandated benefit, offer or provider.
Average Claim Cost Per Contract: $712.13
Average Percent of Total Claims: 19.31%
Average Claim Cost Per Certificate: $980.93
Average Percent of Total Claims: 19.90%
On average, for an individual health insurance contract or subscription contract providing the type of coverage under which mandated benefits, offers and providers are applicable, approximately $712.00 was paid for claims attributable to mandated benefits, offers and providers in 2012. This represents approximately 19% of all claim payments made under this type of individual contract. Likewise, in the 2012 reporting period, $981.00 was paid in claim payments under a group certificate providing applicable coverage, which accounts for approximately 20% of all claim payments made under this type of group certificate.
The above numbers are useful in assessing the average claim cost of mandates relative to claim costs associated with all other benefits. However, these numbers cannot be computed by totaling or averaging the costs associated with individual mandates illustrated elsewhere in this report.
Claim information regarding the rate of utilization of the mandated benefits, offers and providers is also reported. It is anticipated that these rates may also be helpful in assessing the relative effect of new mandates, and in comparing the changes that occur among providers that render similar services from one reporting period to another.