As I mentioned on my last post, we are renewing all lines of coverage for the same premiums as we're paying this year; no changes in coverage or cost for the company or our people. In breaking down the numbers it is obvious that there were three factors contributed to this successful outcome; broad movement to high deductible plans, the discounts of the S network, and good fortune in that we had few high-dollar claims.
Breaking these numbers down further, however, the S network discounts stand out as the real game-changer in our plan.
Just to review, we offer three health plans: a High Deductible Plan with the broader P network (HDP-P), and High Deductible Plan with the S network (HDP-S), and a PPO with the S network (PPO-S).
For the underwriting period April - November, 2011 here's how these plans performed. The HDP-P claims were 116% of premium, meaning that we paid 16% more in claims than we paid in premiums. Were this our only plan our premium increase for next year would be in the 33 - 35% range.
By comparison the HDP-S plan performed at 41.4% claims to premium. Note that this is the same benefits and deductibles as HDP-P; the only difference is HCA hospitals are not providers in this network and those hospital which are providers give deeper discounts.
Finally, the PPO-S performed at 80% claims to premiums. Were this a standalone plan we would be looking at a 2-3% decrease in premiums at renewal. Note that the PPO plan gives the richest benefits, and yet outperforms the HDP-P plan due to the difference in discounts.
As we look at ways to continue holding the line on our insurance costs one of our primary concerns should be moving people away from P network coverage. Our strategy will be encouraging people to move through education. A future strategy could be to unlink these three plans let the premiums "float" to their own levels.
For now we hope to show everyone how a High Deductible Plan and a deep discount network save them more money than staying with their current suburban hospitals and PPO co-pays.