Reduce Your Health Insurance Cost By Knowing the Numbers Leigh A. Mills, AAI, CIC, GBA Vice President -Senior Consultant

1. Reduce Your Health Insurance Cost
By Knowing the Numbers
Leigh A. Mills, AAI, CIC, GBA
Vice President - Senior Consultant

2. Objectives
Coaching How To…..
 Understand
 Be Strategic
 Challenge
 Negotiate
 Impress

3. Claims Data – PMPM

4. Pooling Level

5. Benefit Changes

6. Trend

7. Medical Trend
 Inflation (30%)
• Increased cost of services & goods
 Utilization (60%)
• Technology
• Aging Population
• Government Mandates
• Cost Shifting
 Leverage (10%)

8. MidPoint
Claims Data Period
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
07 07 07 08 08 08 08 08 08 08 08 08
Plan Year Renewal
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
09 09 09 09 09 09 09 09 09 09 09 10
March 2008 – January 2009 = 11 months
February 2009 – July 2009 = 7 months
Total Months of Trend is 18 months

9. Projected Claims in Excess of $100,000
aka Pooling Charge

10. Large Claims Added
 Claimant deceased
 Claimant no longer covered
 Treatment completed
 Unusual claim
 Claim being covered by Medicare

11. Medical Loss Ratio
PPACA set MLR at 85%
 Direct Claims Paid to Providers
 Activities to Improve Healthcare Quality
• Case Management
• Care Coordination
• Chronic Disease Management
• Wellness Programs
• Supporting Health Information Technology
• Hospital Discharge Programs
• Measures to improve patient safety and reduce medical
errors

12. Credibility

13. Credibility
(close enough for horseshoes)
To Estimate:
Number of covered employees x 20
Then take the square root of that
number
For example:
254 employees x 20 = 5080 and the square root is 71
Your claims data is approximately 71% credible

14. Other Adjustments
Underwriters have the
Power to Give
And the
Power to Take Away

15. Leigh A. Mills, AAI, CIC, GBA
Thank You! Vice President,
Senior Consultant
Compass Consulting Group
(904) 434-0822
Leigh.mills@compasscgi.com