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ATTACHMENT B
Inflation & supply
chain disruptions
A combination of inflation for
goods and services and labor
shortages have driven a
10.4% increase in health care
sector costs in 2022.1
Labor shortages
Hospitals and providers are
seeing labor costs increase at
every level. Total expenses per
adjusted discharge rose 3%
month over month and 7%
through October 2022.2
Increased demand
for care
Within Kaiser Permanente’s
system, we’ve seen
significant increases in care
volume, particularly
outpatient services.
Provider challenges
Health care providers
nationwide are facing
significant upward pressure on
the costs to deliver care. By
many accounts, 2022 was the
worst financial year for
hospitals in decades.3
The impacts of inflation, supply chain disruptions, historic labor shortages, and rebounds in care demand are creating economic challenges for the entire health care sector.
1. National Hospital Flash Report, Kaufman, Hall & Associates, LLC, June 2022. 2. “October's labor woes drive higher costs, worsened margins for hospitals:
Kaufman Hall” Fierce Healthcare, October 2022. 3. “Hospitals on Track for Worst Financial Year in Decades” Becker’s Hospital Review, October 2022.
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ATTACHMENT B
PPO UNDERWRITING FORECAST
Proposed Effective Date January 1, 2025
Proposed Contract Duration (Months) 12
Most Recent Month of Data March 2024 RENEWAL PROJECTION* Period Period 1 Period 2
Beginning Date (Historical Data) Apr 1, 2022 Apr 1, 2023 End Date (Historical Data) Apr 1, 2023 Apr 1, 2024
Months of Data 12 12
Current Premium / Funding Rate PEPM1 $113.44
Paid Claims2 $1,336,778 $1,327,192
Beginning IBNR Reserve ($109,752) ($111,398)
Ending IBNR Reserve $111,398 $110,599
Incurred Claims $1,338,424 $1,326,394
Historical Benefit Design Adjustment Factor 1.000 1.000 Adjusted Incurred Claims $1,338,424 $1,326,394
Annual Subscriber Lives 14,602 13,855
Adjusted Incurred Claims PEPM $91.66 $95.73
Annual Trend 1.5% 1.5%
Applied Trend Factor 1.042 1.026
Trended Claims PEPM $95.49 $98.26
Benefit Change Adjustment Factor 1.000 1.000
Projected Claims PEPM $95.49 $98.26
Period Blending Weight 20.0% 80.0%
Blended Projected Claims $97.71
Margin Adjustment3 1.50% $1.47
Fixed Costs
PRISM Delta Dental Admin Fee 6.70% $6.55
BCC Fee $0.75 $0.75
Program Management & UW Fee $0.50 $0.50
Additional Admin $4.28
Alliant Service Fee $2.00
Total Fixed Costs $14.08
Net Required Funding PEPM $113.25
Required Funding Change Percentage -0.16%
1 Current composite funding rate is based
on current period funding rates
2 Paid claims are for the time period
indicated at the top of each column
3 Margin is recommended in order to
provide a higher likelihood that suggested
funding rates are sufficient if actual
claims do not adhere to projections
* Projections are estimates and
do not represent guarantees
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ATTACHMENT B
Enrollment Premium Costs Paid
Month Employees Funding Rate Claims Admin Total Cost L/R 7/21 1,303 $153,973 $132,853 $17,237 $150,090 97.5%
8/21 1,296 $153,622 $99,151 $17,164 $116,315 75.7%
9/21 1,286 $152,779 $131,125 $17,046 $148,171 97.0%
10/21 1,294 $153,586 $113,139 $17,146 $130,285 84.8%
11/21 1,289 $153,247 $116,360 $17,091 $133,451 87.1%
12/21 1,278 $151,819 $117,202 $16,940 $134,142 88.4%
1/22 1,265 $149,922 $94,730 $16,753 $111,483 74.4%
2/22 1,263 $149,723 $112,659 $16,728 $129,387 86.4%
3/22 1,264 $149,442 $146,373 $16,724 $163,097 109.1%
4/22 1,263 $149,044 $112,810 $16,699 $129,509 86.9%
5/22 1,259 $148,799 $111,073 $16,656 $127,729 85.8%
6/22 1,262 $149,197 $137,237 $16,697 $153,935 103.2%
7/22 1,278 $142,248 $96,887 $22,521 $119,408 83.9%
8/22 1,220 $135,647 $112,462 $22,831 $135,293 99.7%
9/22 1,216 $134,973 $123,047 $23,480 $146,526 108.6%
10/22 1,212 $134,300 $92,017 $21,340 $113,357 84.4%
11/22 1,208 $133,627 $94,696 $21,459 $116,156 86.9%
12/22 1,203 $133,251 $114,364 $22,723 $137,087 102.9%
1/23 1,192 $131,651 $108,412 $22,169 $130,581 99.2%
2/23 1,187 $131,110 $121,124 $22,959 $144,083 109.9%
3/23 1,184 $130,988 $124,900 $23,184 $148,084 113.1%
4/23 1,185 $131,044 $104,267 $21,811 $126,078 96.2%
5/23 1,183 $130,591 $108,664 $22,070 $130,735 100.1%
6/23 1,180 $130,105 $128,500 $23,355 $151,855 116.7%
7/23 1,157 $130,951 $97,206 $21,010 $118,216 90.3%
8/23 1,153 $130,133 $134,570 $23,447 $158,016 121.4%
9/23 1,146 $129,509 $82,752 $19,895 $102,647 79.3%
10/23 1,136 $128,601 $85,077 $19,936 $105,012 81.7%
11/23 1,137 $128,601 $140,149 $23,633 $163,782 127.4%
12/23 1,141 $128,942 $103,043 $21,192 $124,235 96.3%
1/24 1,159 $131,348 $116,688 $22,349 $139,037 105.9%
2/24 1,157 $131,121 $130,531 $23,251 $153,782 117.3%
3/24 1,159 $131,121 $97,254 $21,036 $118,291 90.2%
PY 2021-2022 15,322 $1,815,152 $1,424,713 $202,881 $1,627,594 89.7% PY 2022-2023 14,448 $1,599,535 $1,329,340 $269,902 $1,599,242 100.0% 2023-2024 PYTD1 10,345 $1,170,326 $987,269 $195,748 $1,183,018 101.1% Rolling 12 13,893 $1,562,066 $1,328,701 $262,985 $1,591,686 101.9% $0
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Monthly Cost
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Monthly Loss Ratio
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VISION UNDERWRITING FORECAST
Proposed Effective Date January 1, 2025
Proposed Contract Duration (Months) 12
Most Recent Month of Data May 2024 RENEWAL PROJECTION*
Period Period 1 Period 2
Beginning Date (Historical Data) Jun 1, 2022 Jun 1, 2023 End Date (Historical Data) Jun 1, 2023 Jun 1, 2024
Months of Data 12 12
Current Premium / Funding Rate PEPM1 $15.37
Paid Claims2 $207,139 $170,551
Beginning IBNR Reserve ($11,659) ($11,950)
Ending IBNR Reserve $11,950 $9,840
Incurred Claims $207,431 $168,441
Historical Benefit Design Adjustment Factor 1.000 1.000 Adjusted Incurred Claims $207,431 $168,441
Annual Subscriber Lives 16,845 16,464
Adjusted Incurred Claims PEPM $12.31 $10.23
Annual Trend 2.5% 2.5%
Applied Trend Factor 1.066 1.040
Trended Claims PEPM $13.13 $10.64
Network Change Adjustment Factor 1.000 1.000
Projected Claims PEPM $13.13 $10.64
Period Blending Weight 70.0% 30.0%
Blended Projected Claims $12.38
Margin Adjustment3 0.00% $0.00
Fixed Costs
Admin Fee $1.25
Additional City Admin $0.77
Total Fixed Costs $2.02
Net Required Funding PEPM $14.40
Required Funding Change Percentage -6.35%
1 Current composite funding rate is based
on current period funding rates
2 Paid claims are for the time period
indicated at the top of each column
3 Margin is recommended in order to
provide a higher likelihood that suggested
funding rates are sufficient if actual
claims do not adhere to projections
* Projections are estimates and
do not represent guarantees
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$1.25 PEPM
ATTACHMENT B
Enrollment Premium Costs Paid
Month Employees Funding Rate Claims Admin Total Cost L/R 7/21 1,481 $23,205 $15,880 $2,910 $18,790 81.0%
8/21 1,446 $22,806 $18,434 $2,848 $21,282 93.3%
9/21 1,432 $22,645 $20,600 $2,823 $23,423 103.4%
10/21 1,444 $22,786 $20,854 $2,845 $23,699 104.0%
11/21 1,446 $22,821 $20,672 $2,849 $23,521 103.1%
12/21 1,445 $22,791 $18,023 $2,846 $20,869 91.6%
1/22 1,432 $22,514 $20,081 $2,817 $22,898 101.7%
2/22 1,428 $22,445 $16,564 $2,809 $19,373 86.3%
3/22 1,436 $22,450 $17,686 $2,819 $20,506 91.3%
4/22 1,435 $22,376 $20,884 $2,815 $23,699 105.9%
5/22 1,430 $22,330 $19,101 $2,806 $21,907 98.1%
6/22 1,423 $22,194 $16,692 $2,791 $19,483 87.8%
7/22 1,429 $21,529 $12,798 $2,808 $15,607 72.5%
8/22 1,402 $21,132 $22,262 $2,756 $25,018 118.4%
9/22 1,408 $21,160 $18,596 $2,765 $21,360 100.9%
10/22 1,395 $20,953 $20,841 $2,738 $23,580 112.5%
11/22 1,406 $21,003 $17,806 $2,755 $20,561 97.9%
12/22 1,410 $21,014 $17,952 $2,760 $20,712 98.6%
1/23 1,392 $20,754 $14,113 $2,725 $16,838 81.1%
2/23 1,394 $20,763 $20,048 $2,728 $22,776 109.7%
3/23 1,395 $20,786 $12,645 $2,730 $15,375 74.0%
4/23 1,396 $20,789 $17,739 $2,732 $20,471 98.5%
5/23 1,395 $20,726 $15,647 $2,728 $18,374 88.7%
6/23 1,396 $20,725 $15,064 $2,729 $17,793 85.9%
7/23 1,367 $21,181 $13,582 $2,731 $16,313 77.0%
8/23 1,379 $21,289 $18,333 $2,751 $21,085 99.0%
9/23 1,346 $20,862 $14,603 $2,690 $17,292 82.9%
10/23 1,347 $20,859 $16,103 $2,691 $18,793 90.1%
11/23 1,391 $21,451 $12,598 $2,774 $15,372 71.7%
12/23 1,376 $21,241 $15,673 $2,746 $18,419 86.7%
1/24 1,375 $21,251 $13,178 $2,745 $15,922 74.9%
2/24 1,369 $21,173 $12,003 $2,733 $14,736 69.6%
3/24 1,378 $21,273 $17,086 $2,749 $19,836 93.2%
4/24 1,393 $21,451 $12,783 $2,777 $15,559 72.5%
5/24 1,393 $21,417 $9,547 $2,775 $12,322 57.5%
PY 2021-2022 17,278 $271,363 $225,471 $33,978 $259,449 95.6% PY 2022-2023 16,818 $251,334 $205,511 $32,954 $238,465 94.9% 2023-2024 PYTD1 15,114 $233,447 $155,487 $30,163 $185,650 79.5% Rolling 12 16,510 $254,172 $170,551 $32,892 $203,443 80.0% $0
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6/23 7/23 8/23 9/23 10/23 11/23 12/23 1/24 2/24 3/24 4/24 5/24 Monthly Cost
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6/23 7/23 8/23 9/23 10/23 11/23 12/23 1/24 2/24 3/24 4/24 5/24 Monthly Loss Ratio
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