Thursday, October 24, 2013

WellPoint/Anthem Blue Cross Report Their Medical Trend to be Just 6%

That should make for some fun negotiation when they hand out 10% increases.  This is straight from their press release as reported by the Wall Street Journal:  (Hat tip, Ryan Kennedy)
Benefit Expense Ratio: The benefit expense ratio was 84.9 percent in the third quarter of 2013, a decrease of 50 basis points from 85.4 percent in the prior year quarter, primarily due to improvements in the Medicare business. The Company also experienced modest declines in the ratios for its Commercial business and its California Medicaid operations. These improvements were partially offset by the inclusion of Amerigroup business in the current year quarter, as this business carries a higher average benefit expense ratio than the consolidated Company average, and increased benefit expense in the cost-plus Federal Employee Program ("FEP"). 
Medical claims reserves established at December 31, 2012, developed in-line with the Company's expectation during the first nine months of 2013. 
Medical Cost Trend: The Company now expects that underlying Local Group medical cost trend will be in the range of 6.0 percent, plus or minus 50 basis points, for the full year 2013. Unit cost increases and utilization have been lower than anticipated through the first nine months of 2013. 
Days in Claims Payable: Days in Claims Payable ("DCP") was 40.0 days as of September 30, 2013, a decrease of 0.5 days from 40.5 days as of June 30, 2013. The decline was due primarily to changes in the timing of claims payments between periods.