Rochester Business Journal

MVP Health Care plans to hike rates for Rochester-area community-rated group-plan premiums by 12 percent to 25 percent in 2010, MVP officials said Monday. The increase compares with a 10 percent to 18.9 percent spread Excellus Blue Cross Blue Shield announced for its 2010 community-rated plan increases.

MVP officials cited the following among the reasons for the double-digit increases:

• Higher New York taxes and assessments;
• Increased use of health care services in part encouraged by federal expansion and subsidy of COBRA and a spike in H1N1 flu cases;
• New federal rules requiring parity of mental health and substance abuse benefits; and
• Bigger than anticipated increases in payments to hospitals, physicians and other providers.

Lumping together community-rated and experience-rated subscribers, Excellus on Nov. 2 expressed its average increase as 5.7 percent. MVP officials dismissed the number as meaningless because it fails to note how many are in community-rated versus experience-rated plans.

In experience rating, each group’s rate is based on its previous year’s claims. In community rating, a number of groups are put in a risk pool and charged rates based on an average of all members’ experience.

State law requires firms with 50 or fewer workers to be community rated.
 
Some of the area’s largest employers, including the University of Rochester, Eastman Kodak Co., Xerox Corp., all Monroe County school districts and the Rochester Institute of Technology along with smaller companies have switched to experience rating as a cost-saving move.

The Schenectady-based MVP and Excellus, which is based in Rochester, account for most of the Rochester area’s commercial health insurance business. In the roughly 1 million in population nine-county region, MVP writes policies insuring 339,474. Excellus, which does not state Rochester-area enrollment, is thought to cover most of the remaining population.

A majority of MVP’s Rochester-area enrollees—130,000—are in community-rated plans, MVP spokesman Michael Traphagan said. Another 100,000 are enrolled in the company’s Medicare Advantage plan and 20,000 are in “safety net” plans such as Medicaid, leaving fewer than 100,000 in experience-rated groups, he said.
           
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