SERFF Tracking #: Project Name/Number: Filing at a Glance · Filing at a Glance Company: Blue Cross & Blue Shield of Rhode Island Product Name: Individual Medical 1.1.2016 ... Group

Filing at a Glance Company: Blue Cross & Blue Shield of Rhode Island

Product Name: Individual Medical 1.1.2016

State: Rhode Island

TOI: H15I Individual Health - Hospital/Surgical/Medical Expense

Sub-TOI: H15I.001 Health - Hospital/Surgical/Medical Expense

Filing Type: Rate

Date Submitted: 05/15/2015

SERFF Tr Num: BCBS-130074424

SERFF Status: Assigned

State Tr Num:

State Status: Open-Pending Actuary Review

Co Tr Num: INDM20150515

Co Status:

ImplementationDate Requested:

01/01/2016

Author(s): Catherine Mitchell, Tim Laiter, Donna Goliger, Sam Chhay, Adam Barkley, MichaelBodenrader, Huy Ho

Reviewer(s): Linda Johnson (primary), Sandra West, Charles DeWeese, Herbert Olson, Maria Casale,Sarah Nguyen, John Garrett, cory king, Bela Gorman

Disposition Date:

Disposition Status:

Implementation Date:

SERFF Tracking #: BCBS-130074424 State Tracking #: Company Tracking #: INDM20150515

State: Rhode Island Filing Company: Blue Cross & Blue Shield of Rhode Island

TOI/Sub-TOI: H15I Individual Health - Hospital/Surgical/Medical Expense/H15I.001 Health - Hospital/Surgical/MedicalExpense


Project Name/Number: /

PDF Pipeline for SERFF Tracking Number BCBS-130074424 Generated 06/02/2015 07:29 AM

General Information

Company and Contact

Filing Fees

Project Name: Status of Filing in Domicile: Not Filed

Project Number: Date Approved in Domicile:

Requested Filing Mode: Review & Approval Domicile Status Comments:

Explanation for Combination/Other: Market Type: Individual

Submission Type: New Submission Individual Market Type: Individual

Overall Rate Impact: Filing Status Changed: 05/18/2015

Company Status Changed: State Status Changed: 05/18/2015

Deemer Date: Created By: Michael Bodenrader

Submitted By: Sam Chhay Corresponding Filing Tracking Number: BCBS-130010192

PPACA: Non-Grandfathered Immed Mkt Reforms

Exchange Intentions: BCBSRI intends to offer 20 plans on HSRI.

Filing Description:

Blue Cross & Blue Shield of Rhode Island, May 15 filing for Individual Health Insurance Products, effective January 1, 2015.

Filing Contact InformationJeffrey McLane, Associate Actuary [email protected]

500 Exchange St.

Providence, RI 02903

401-459-1000 [Phone] 5390 [Ext]

Filing Company InformationBlue Cross & Blue Shield of RhodeIsland

500 Exchange Street

Providence, RI 02903

(401) 459-1000 ext. [Phone]

CoCode: 53473

Group Code:

Group Name:

FEIN Number: 05-0158952

State of Domicile: RhodeIsland

Company Type: HealthInsurance

State ID Number:

Fee Required? Yes

Fee Amount: $525.00

Retaliatory? No

Fee Explanation: 21 plans @ $25 each = $525

Per Company: Yes

Company Amount Date Processed Transaction #Blue Cross & Blue Shield of Rhode Island $525.00 05/15/2015 95673324







Correspondence Summary AmendmentsSchedule Schedule Item Name Created By Created On Date SubmittedRate 2016 Individual - Consumer Narrative Tim Laiter 06/01/2015 06/01/2015Rate 2016 Individual - Actuarial Memo Tim Laiter 06/01/2015 06/01/2015Rate 2016 Individual - OHIC Rate Review Template Tim Laiter 06/01/2015 06/01/2015Rate 2016 Individual - Unified Rate Review Template Sam Chhay 05/15/2015 06/01/2015Rate Supporting Documentation Tim Laiter 06/01/2015 06/01/2015



TOI/Sub-TOI: H15I Individual Health - Hospital/Surgical/Medical Expense/H15I.001 Health - Hospital/Surgical/Medical Expense




Amendment Letter

Submitted Date: 06/01/2015

Comments:

Revised submission 6/01/2015

Changed Items: No Form Schedule Items Changed.







Rate/Rule Schedule Item Changes

Item

No. Document Name

Affected Form

Numbers

(Separated with

commas)

Rate Action Rate Action

Information

Attachments Date Submitted

1 2016 Individual -Consumer Narrative

New DP ConsumerNarrative FINAL060115 clean.pdf, DPConsumer NarrativeFINAL 060115redline.pdf,

06/01/2015By:

Previous Version1 2016 Individual -

Consumer NarrativeNew 2016 Individual -

Consumer NarrativeFINAL.pdf,

05/15/2015By: Sam Chhay

2 2016 Individual -Actuarial Memo

New Care TransformationCollaborative of RI -CY2014 Ledgers.pdf,Care TransformationCollaborative of RI -CY2014 Invoices.pdf,Current Care - CY2014Invoices.pdf, 2016Individual - AddendumB FINAL.pdf,2016_Ind_ActuarialMemo FINAL Revised06012015.pdf,2016_Ind_ActuarialMemo FINALRevised 06012015redline.pdf, 2016Individual - AppendicesRevised 06012015.pdf,

06/01/2015By:


Actuarial MemoNew 2016 Individual -

Actuarial MemoFINAL.pdf, CareTransformationCollaborative of RI -CY2014 Ledgers.pdf,Care TransformationCollaborative of RI -








Rate/Rule Schedule Item ChangesCY2014 Invoices.pdf,Current Care - CY2014Invoices.pdf, 2016Individual - AddendumB FINAL.pdf, 2016Individual -Appendices.pdf,

3 2016 Individual - OHICRate Review Template

New Final Ind 2016 RateFiling OHIC TempRevised 06012015.pdf,

06/01/2015By:

Previous Version3 2016 Individual - OHIC

Rate Review TemplateNew 2016 Individual Rate

Filing OHIC TemplateFINAL.pdf,


4 2016 Individual -Unified Rate ReviewTemplate

New Unified_Rate_Review_Ind_2016_FilingRevised 06012015.pdf,

06/01/2015By:


Unified Rate ReviewTemplate

New Unified_Rate_Review_Ind_2016_Filing.pdf,


5 SupportingDocumentation

New SupportingDocumentation DP6_1_15 submissionFINAL.pdf,

06/01/2015By:

No Supporting Documents Changed.







Post Submission Update Request Submitted On 06/01/2015

Status: Submitted

Created By: Donna Goliger







Company Rate Information:

Company Name:Blue Cross & Blue Shield of Rhode Island

Field Name Requested Change Prior Value

Overall % Indicated Change 10.970% 17.930%

Overall % Rate Impact 10.970% 17.930%

Written Premium Change for this Program$17854637 $17966512

Written Premium for this Program $196401014 $197631637

Maximum %Change (where required) 25.400% 13.500%

Minimum %Change (where required) -12.900% 1.200%

Product: BlueSolutions for HSA DirectWOPD

UPDATED

Number of Covered Lives 1477 1630

Product: BlueSolutions for HSA DirectWPD

UPDATED

Number of Covered Lives 13193 13447

Product: NEW

Product Name BlueSolutions for HSA Direct WPDA

HIOS Product ID 15287RI027

HIOS Submission ID 15287-243505

Number of Covered Lives 254

Product: NEW

Product Name BlueSolutions for HSA Direct WOPDA

HIOS Product ID 15287RI027

HIOS Submission ID 15287-243505

Number of Covered Lives 153

REQUESTED RATE CHANGE INFORMATION:

Min: -12.900 -13.000

Max: 25.400 25.3

Weighted Avg.: 11.000 10.9

PRIOR RATE:

Min: 98.140 97.950

Max: 897.790 896.040

Weighted Avg.: 392.170 392.940

REQUESTED RATE:

Projected Earned Premium: 196,401,014.000 197,631,637.000

Projected Incurred Claims: 149,740,170.000 149,813,339.000

Min: 123.090 122.750







Max: 1,046.760 1,043.880

Weighted Avg.: 435.210 435.720







Rate Information Rate data applies to filing.

Filing Method: Review and Approve

Rate Change Type: Increase

Overall Percentage of Last Rate Revision: %

Effective Date of Last Rate Revision: 01/01/2015

Filing Method of Last Filing: Review and Approve

Company Rate Information

Company

Name:

Company

Rate

Change:

Overall %

Indicated

Change:

Overall %

Rate

Impact:

Written

Premium

Change for

this Program:

Number of Policy

Holders Affected

for this Program:

Written

Premium for

this Program:

Maximum %

Change

(where req'd):

Minimum %

Change

(where req'd):

Blue Cross & BlueShield of RhodeIsland

Increase 17.930% 17.930% $17,966,512 25,674 $197,631,637 13.500% 1.200%







Rate Review Detail

COMPANY:Company Name: Blue Cross & Blue Shield of Rhode Island

HHS Issuer Id: 15287

PRODUCTS:

Product Name HIOS Product ID HIOS Submission ID Number of Covered

LivesBasicBlue Direct WOPD 15287RI071 15287-243505 1251BasicBlue Direct WPD 15287RI070 15287-243505 6008BlueCHiP Advance Direct WOPD 15287RI074 15287-243505 123BlueCHiP Advance Direct WPD 15287RI073 15287-243505 4846BlueSolutions for HSA Direct WOPD 15287RI035 15287-243505 1630BlueSolutions for HSA Direct WPD 15287RI002 15287-243505 13447VantageBlue Direct WOPD 15287RI036 15287-243505 3041VantageBlue Direct WPD 15287RI027 15287-243505 7958

Trend Factors: Overall trend of 4.5% is comprised of: inpatient trend of 3.4%, outpatient trend of 5.1%,professional trend of 2.3%, and prescription drug trend of 9.5%.

FORMS:New Policy Forms: I-Plan 3A-2016-BX AND I-Plan 8A-2016-BX AND I-Plan 8B-2016-BX AND I-Plan 9A-

2016-BX AND I-Plan 9B-2016-BX AND I-Plan 10A-2016-BX AND I-Plan 10B-2016-BXAND I-Plan 11A-2016-BX AND I-Plan 11B-2016-BX AND I-Plan 1A-2016-BX AND I-Plan1B-2016-BX AND I-Plan 2A-2016-BX AND I-Plan 2B-2016-BX AND I-Plan 4C-2016-BXAND I-Plan 4D-2016-BX AND I-Plan 5A-2016-BX AND I-Plan 5B-2016-BX AND I-Plan6C-2016-BX AND I-Plan 6D-2016-BX AND I-Plan 7C-2016-BX AND I-Plan 7D-2016-BX

Affected Forms:

Other Affected Forms:

REQUESTED RATE CHANGE INFORMATION:Change Period: Annual

Member Months: 459,648

Benefit Change: Decrease

Percent Change Requested: Min: -13.0 Max: 25.3 Avg: 10.9

PRIOR RATE:Total Earned Premium: 118,533,996.00

Total Incurred Claims: 97,545,131.00

Annual $: Min: 97.95 Max: 896.04 Avg: 392.94

REQUESTED RATE:Projected Earned Premium: 197,631,637.00

Projected Incurred Claims: 149,813,339.00

Annual $: Min: 122.75 Max: 1,043.88 Avg: 435.72







Rate/Rule Schedule







Item

No.

Schedule

Item

Status

Document Name

Affected Form Numbers

(Separated with commas) Rate Action Rate Action Information Attachments

1 2016 Individual - Cover Letter New 2016 Direct Pay Coverletter FINALsigned.pdf,

2 2016 Individual - ConsumerNarrative

New DP ConsumerNarrative FINAL060115 clean.pdf, DPConsumer NarrativeFINAL 060115redline.pdf,

3 2016 Individual - ActuarialMemo

New Care TransformationCollaborative of RI -CY2014 Ledgers.pdf,Care TransformationCollaborative of RI -CY2014 Invoices.pdf,Current Care - CY2014Invoices.pdf, 2016Individual - AddendumB FINAL.pdf,2016_Ind_ActuarialMemo FINAL Revised06012015.pdf,2016_Ind_ActuarialMemo FINALRevised 06012015redline.pdf, 2016Individual - AppendicesRevised 06012015.pdf,

4 2016 Individual - OHIC RateReview Template

New Final Ind 2016 RateFiling OHIC TempRevised 06012015.pdf,

5 2016 Individual - Unified RateReview Template

New Unified_Rate_Review_Ind_2016_FilingRevised 06012015.pdf,

6 2014 & 2013 NAICSupplemental Exhibits

New 2013 - HCEPT1.pdf,2013 - HCEPT2.pdf,2013 - HCEPT3.pdf,2014 - HCEPT1.pdf,2014 - HCEPT2.pdf,2014 - HCEPT3.pdf,







7 Supporting Documentation New SupportingDocumentation DP6_1_15 submissionFINAL.pdf,







Consumer Disclosure – Individual Market

1

Blue Cross & Blue Shield of Rhode Island (“BCBSRI”) has submitted its annual rate filing for the individual market (also known as direct pay). This document gives an overview of that filing.

Scope and Range of the Rate Increase: The overall average rate increase in the filing is 18.0%. The actual increase for an individual now enrolled will vary based upon:

the age of each person enrolled;

the plan chosen; and

if the person is eligible for federal subsidies. This filing impacts about 25,000 individuals now enrolled with BCBSRI. These individuals are enrolled either:

directly with BCBSRI; or

through HealthSource RI, Rhode Island’s health insurance marketplace. The rate increase will take effect January 1, 2016. Rates will stay in effect until December 31, 2016. Key Drivers for this Filing: The rate increase for 2016 is due to two main factors:

the continued rise in the total cost of health care in Rhode Island; and

the phase-out of the Temporary Reinsurance program under the Patient Protection and Affordable Care Act (“ACA”).

Premium is driven mainly by the cost of health services BCBSRI pays on behalf of our members. This filing reflects a projected medical loss ratio (“MLR”) of 83.9% using the federal formula. The MLR is the percent of each premium dollar that we spend to pay for healthcare services for and activities that improve the quality of care of our members. The federal government requires an MLR of 80% or higher in the individual market. Medical expenses are driven by:

how often and how much health care is received (utilization); and

the price a healthcare provider charges for those services (cost).

For 2016, increases in the cost of medical services, including prescription drugs, continue to drive the increase in overall medical expenses. New drug treatments account for a large part of the increase in medical costs. While utilization has not risen at the rate we have seen in other years, the projected rise in the price of services results in an increase in rates. Administrative costs factor into this filing as well as premium taxes paid to the state of Rhode Island.

In addition to the medical expense increases described above, the 2016 premium increase is also affected by increased costs due to the ACA, including taxes and fees. A significant increase is due to the phase-out of the federal Reinsurance program. The Reinsurance program is a temporary program started under the ACA. It pays for a certain percentage of claims over a threshold amount. This program is very much reduced in 2016. It will be eliminated at the end of 2016. Also, a fee proposed by the state to fund HealthSource RI, adds a 5.6% increase to the rate.

2

Changes in Benefits: At the same time as this filing, BCBSRI submitted plans to the Office of Health Insurance Commissioner for approval. The plan filing makes minor changes to current plans. This includes changes to cost sharing amounts and annual out of pocket maximums consistent with federal regulations. Benefit changes will take effect on January 1, 2016. BCBSRI will also add five new plans to the direct pay market in 2016. From November 1, 2015 through January 31, 2016 (open enrollment), individuals will have the choice of any plan offered in the direct pay market. As of January 1, 2016, BCBSRI will no longer offer five plans in the direct pay market. The plans that will no longer be offered are VantageBlue Direct 5800/11600, VantageBlue SelectRI Direct 500/1000, VantageBlue Select RI Direct 3000/6000, VantageBlue SelectRI Direct 5800/11600, and BasicBlue Direct. Members that are now enrolled in one of these plans will receive notice that their plan will no longer be available after December 31, 2015. Members will have the option to select any other plan offered in the direct pay market. We will help these members select a new plan that meets their needs.


1


Scope and Range of the Rate Increase: The overall average rate increase in the filing is 17.918.0%. The actual increase for an individual now enrolled will vary based upon:








Premium is driven mainly by the cost of health services BCBSRI pays on behalf of our members. These medical expenses make up more than 79% of each premium dollar BCBSRI collects in the direct pay market. This filing reflects a projected medical loss ratio (“MLR”) of 83.9% using the federal formula. The MLR is the percent of each premium dollar that we spend to pay for healthcare services for and activities that improve the quality of care of our members. The federal government requires an MLR of 80% or higher in the individual market. Medical expenses are driven by:





2

Changes in Benefits: At the same time as this filing, BCBSRI submitted plans to the Office of Health Insurance Commissioner for approval. The plan filing makes minor changes to current plans. This includes changes to cost sharing amounts and annual out of pocket maximums consistent with federal regulations. Benefit changes will take effect on January 1, 2016. BCBSRI will also add five new plans to the direct pay market in 2016, including a new tiered network plan. From November 1, 2015 through January 31, 2016 (open enrollment), individuals will have the choice of any plan offered in the direct pay market. As of January 1, 2016, BCBSRI will no longer offer five plans in the direct pay market. The plans that will no longer be offered are VantageBlue Direct 5800/11600, VantageBlue SelectRI Direct 500/1000, VantageBlue Select RI Direct 3000/6000, VantageBlue SelectRI Direct 5800/11600, and BasicBlue Direct. Members that are now enrolled in one of these plans will receive notice that their plan will no longer be available after December 31, 2015. Members will have the option to select any other plan offered in the direct pay market. We will help these members select a new plan that meets their needs.

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Care Transformation Collaborative of RI Ledgers - Page 1 of 10

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GL# GL# GL#513040 513050 5131000.78 0.03 0.19

Practice_Site Phase Commercial Medicare Total PMPM PMPM Payment Additional Total Q4 2014 Payment Commercial Comm Chip Medicare Tax IDCOASTAL MEDICAL ‐ GREENVILLE 1 2585 755 3340 7.75$ 77,655$ 77,655$ 60,571$ 2,330$ 14,754$ 05‐0483739COASTAL MEDICAL ‐ WAKEFIELD 2 1097 237 1334 8.00$ 32,016$ 32,016$ 24,972$ 960$ 6,083$ 05‐0483739COASTAL ‐ NARRAGANSETT FAMILY MED 2 1519 191 1710 8.00$ 41,040$ 41,040$ 32,011$ 1,231$ 7,798$ 05‐0483739COASTAL ‐ HILLSIDE AVE FAMILY & COMMUNITY MED LLC 1 2497 359 2856 7.75$ 66,402$ 66,402$ 51,794$ 1,992$ 12,616$ 05‐0483739FAMILY HEALTH AND SPORTS MEDICINE 1 1654 312 1966 8.25$ 48,659$ 48,659$ 37,954$ 1,460$ 9,245$ 05‐0401512KRISTINE A CUNNIFF DO 2 664 58 722 8.00$ 17,328$ 17,328$ 13,516$ 520$ 3,292$ 20‐4293436MEMORIAL HOSPITAL FAMILY CARE CENTER 2 66 86 152 6.75$ 3,078$ 3,078$ 2,401$ 92$ 585$ 05‐0259004SC INTERNAL MEDICINE 2 2145 454 2599 7.75$ 60,427$ 60,427$ 47,133$ 1,813$ 11,481$ 05‐0465994SILVER SPRING HEALTHCARE (South County)FAMILY PRACTICE 2 1420 125 1545 8.00$ 37,080$ 37,080$ 28,922$ 1,112$ 7,045$ 05‐0459095STUART V DEMIRS MD 2 530 75 605 8.00$ 14,520$ 14,520$ 11,326$ 436$ 2,759$ 05‐0479244THUNDERMIST HEALTH CENTER ‐ WAKEFIELD 2 396 53 449 7.25$ 9,766$ 9,766$ 7,617$ 293$ 1,855$ 05‐0355097THUNDERMIST HEALTH CENTER ‐ WOONSOCKET 1 584 136 720 7.75$ 16,740$ 16,740$ 13,057$ 502$ 3,181$ 05‐0355097UNIVERSITY MEDICINE ‐ GOVERNOR ST 1 1801 602 2403 8.25$ 59,474$ 59,474$ 46,390$ 1,784$ 11,300$ 05‐0450410University Family Medicine 2 1956 263 2219 7.50$ 49,928$ 49,928$ 38,943$ 1,498$ 9,486$ 04‐9749650Blackstone Valley 2 715 90 805 7.25$ 17,509$ 17,509$ 13,657$ 525$ 3,327$ 05‐10183476East Bay ‐ Newport 2 129 19 148 5.50$ 2,442$ 2,442$ 1,905$ 73$ 464$ 05‐0310024Anchor Medical Associates ‐ Lincoln 1631 474 2105 6.50$ 41,048$ 41,048$ 32,017$ 1,231$ 7,799$ 05‐0508079Anchor Medical Associates ‐ Providence 3141 639 3780 6.50$ 73,710$ 73,710$ 57,494$ 2,211$ 14,005$ 05‐0508079Anchor Medical Associates ‐ Warwick 1172 370 1542 6.50$ 30,069$ 30,069$ 23,454$ 902$ 5,713$ 05‐0508079

UM ‐Aquidneck Medical Associates ‐ Newport ‐ NO MONEY ‐ DUE TO Q3 CORRECTION 1572 242 1814 6.50$ 35,373$ ‐$ ‐$ ‐$ 05‐0450410UNIVERSITY MEDICINE ‐ AQUIDNECK ‐ Portsmouth ‐ Dr. Fielding ‐ NO MONEY ‐ DUE TO Q3 CORRECTION 129 13 142 6.00$ 2,556$ 395$ 308$ 12$ 75$ 05‐0450410Associates in Primary Care Medicine 1036 197 1233 6.00$ 22,194$ 22,194$ 17,311$ 666$ 4,217$ 05‐0355799Comprehensive Community Action Program ‐ Family Health Services of Coventry (MacArthur Blvd) 222 87 309 6.00$ 5,562$ 5,562$ 4,338$ 167$ 1,057$ 05‐6018801Comprehensive Community Action Program ‐ Family Health Services of Cranston (Cranston St., Cranston) 234 55 289 6.00$ 5,202$ 5,202$ 4,058$ 156$ 988$ 05‐6018801Comprehensive Community Action Program ‐ Wilcox Health Center (Buttonwwood Ave, Warwick) 106 32 138 6.00$ 2,484$ 2,484$ 1,938$ 75$ 472$ 05‐6018801CCAP FAMILY HEALTH SERVICE, DORIC AVE (membership in other CCAP) 0 0 6.00$ ‐$ ‐$ ‐$ ‐$ ‐$ 05‐6018802East Bay Community Action Program ‐ East Bay Family Health Care ‐ East Providence 295 78 373 6.00$ 6,714$ 6,714$ 5,237$ 201$ 1,276$ 05‐0310024Family Medicine at Women's Care 383 49 432 5.50$ 7,128$ 7,128$ 5,560$ 214$ 1,354$ 05‐0501178Internal Medicine Center (Memorial Hospital) 66 86 152 5.50$ 2,508$ 2,508$ 1,956$ 75$ 477$ 05 0259004Internal Medicine Partners 198 74 272 6.00$ 4,896$ 4,896$ 3,819$ 147$ 930$ 26‐3597485Medical Associates of RI ‐ Barrington 253 1 254 6.50$ 4,953$ 4,953$ 3,863$ 149$ 941$ 05‐0340866Medical Associates of RI ‐ Hope St, Bristol 3982 1394 5376 6.50$ 104,832$ 104,832$ 81,769$ 3,145$ 19,918$ 05‐0340866Nardone Medical Associates 463 175 638 5.50$ 10,527$ 10,527$ 8,211$ 316$ 2,000$ 55‐0798163Ocean State Medical, LLC 2579 610 3189 6.50$ 62,186$ 62,186$ 48,505$ 1,866$ 11,815$ 45‐3731619Richard M Del Sesto 483 77 560 5.50$ 9,240$ 9,240$ 7,207$ 277$ 1,756$ 22‐3871268South County Walk‐in & Primary Care 957 96 1053 5.50$ 17,375$ 17,375$ 13,552$ 521$ 3,301$ 05‐0513293Thundermist CHC ‐ West Warwick 928 136 1064 6.00$ 19,152$ 19,152$ 14,939$ 575$ 3,639$ 05‐0355097Tri Town Community Action Program 233 41 274 5.50$ 4,521$ 4,521$ 3,526$ 136$ 859$ 05‐0309695University Internal Medicine 2420 681 3101 6.50$ 60,470$ 60,470$ 47,166$ 1,814$ 11,489$ 65‐1164325University Medicine ‐ 909 North Main Street 2396 683 3079 6.50$ 60,041$ 60,041$ 46,832$ 1,801$ 11,408$ 05‐0450410University Medicine ‐ Barrington 826 303 1129 6.00$ 20,322$ 20,322$ 15,851$ 610$ 3,861$ 05‐0450410University Medicine ‐ East Ave, Pawtucket (Geri) 10 171 181 6.00$ 3,258$ 3,258$ 2,541$ 98$ 619$ 05‐0450410University Medicine ‐ Plain Street 2603 422 3025 6.50$ 58,988$ 58,988$ 46,010$ 1,770$ 11,208$ 05‐0450410University Medicine ‐ Warwick Family Medicine 698 105 803 6.50$ 15,659$ 15,659$ 12,214$ 470$ 2,975$ 05‐0450410WellOne Primary Medicine ‐ Foster 420 251 671 6.50$ 13,085$ 13,085$ 10,206$ 393$ 2,486$ 05‐0258811WellOne Primary Medicine ‐ North Kingstown 310 77 387 6.00$ 6,966$ 6,966$ 5,433$ 209$ 1,324$ 05‐0258811WellOne Primary Medicine ‐ Pascoag 1178 191 1369 6.00$ 24,642$ 24,642$ 19,221$ 739$ 4,682$ 05‐0258811Women's Primary Care, Women's Medicine Collaborative 2041 77 2118 5.50$ 34,947$ 34,947$ 27,259$ 1,048$ 6,640$ 05 0258905

1,306,230$

Blue Cross Blue Shield of Rhode IslandCSI Attribution: Member Summary ‐ 2014 Q4

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Address Confirmation E‐mail to be sent to: PCP Grid Name10 Davol Square, Suite 400, Providence, RI 02903 Attn: Chris Ferraro [email protected] COASTAL MEDICAL ‐ GREENVILLE10 Davol Square, Suite 400, Providence, RI 02903 Attn: Chris Ferraro [email protected] COASTAL MEDICAL ‐ WAKEFIELD10 Davol Square, Suite 400, Providence, RI 02903 Attn: Chris Ferraro [email protected] COASTAL ‐ SOUTH COUNTY FAMILY10 Davol Square, Suite 400, Providence, RI 02903 Attn: Chris Ferraro [email protected] COASTAL MEDICAL ‐ HILLSIDE FAMILY MED725 Reservoir Avenue, Suite 102, Cranston, RI 02910 [email protected] FAMILY HEALTH AND SPORTS MEDICINE350 Kingstown Rd, Ste 101, Narragansett, RI 02882 [email protected] KRISTINE A CUNNIFF DO111 Brewster Street, Pawtucket, RI 02860 [email protected] MEMORIAL HOSPITAL, INTERNAL MEDICINE CENTER481 Kingstown Road, Wakefield, RI 02879 [email protected] SC INTERNAL MEDICINESouth County Hospital, 100 Kenyan Ave, Wakefield, RI 02879 [email protected] South County Hospital Family Medicine4099 Old Post Rd, Charlestown, RI 02813 [email protected] STUART V DEMIRS MD450 Clinton Street, Woonsocket, RI 02895 [email protected] THUNDERMIST HEALTH CENTER ‐ WAKEFIELD450 Clinton Street, Woonsocket, RI 02895 [email protected] THUNDERMIST HEALTH CENTER ‐ WOONSOCKET17 Virginia Avenue, Providence, RI [email protected] UNIVERSITY MEDICINE ‐ GOVERNOR ST1351 South County Trail, Suite 301, East Greenwich, RI 02818 [email protected] UNIVERSITY FAMILY MED INC39 East Avenue, Pawtucket, RI 02860 [email protected] BLACKSTONE VLY COMM HLTH19 Broadway, Newport, RI 02840, Attn: Finance Dept. [email protected] EAST BAY COMMUNITY ACTION, NEWPORT1 Commerce Street, 2nd Floor, Lincoln, RI 02865 Joyce Caraman ([email protected]) ANCHOR LINCOLN1 Hopping Street, 3rd Floor, Providence, RI 02903 Joyce Caraman ([email protected]) ANCHOR MEDICAL PROVIDENCE400 Bald Hill Road, Suit 520, Warwick, RI 02886 Joyce Caraman ([email protected]) ANCHOR WARWICK

17 Virginia Avenue, Providence, RI [email protected] UNIVERSITY MEDICINE ‐ AQUIDNECK17 Virginia Avenue, Providence, RI [email protected] UNIVERSITY MEDICINE ‐ AQUIDNECK Portsmouth857 Post Road, Warwick, RI 02888 Martin Kerzer ([email protected]) ASSOC IN PRIMARY CARE MED191 MacArthur Boulevard, Coventry, RI 02816 Lois Teitz ([email protected]) CCAP FAMILY HEALTH SERVICE, MACARTHUR BLVD311 Doric Avenue, Cranston, RI 02910 Lois Teitz ([email protected]) CCAP FAMILY HEALTH SERVICE, CRANSTON ST226 Buttonwoods Avenue, Warwick, RI 02886 Lois Teitz ([email protected]) CCAP FAMILY HEALTH SERVICE, BUTTONWOODS AVE311 Doric Avenue, Cranston, RI 02910 Lois Teitz ([email protected]) CCAP FAMILY HEALTH SERVICE, DORIC AVE100 Bullocks Point Avenue, East Providence, RI 02915 Elizabeth Dennigan ([email protected]) EAST BAY COMMUNITY ACTION, BULLOCKS POINT407 East Ave, Suite 150, Pawtucket, RI 02860 Gail Gravel (ggravel@women‐care.net) Family Medicine at Womens Care111 Brewster Street, Pawtucket, RI 02860 [email protected] MEMORIAL HOSPITAL, INTERNAL MEDICINE CENTER1635 Mineral Spring Avenue, Suit 200, North Providence, RI 02904 Puneet Sud ([email protected]) Internal Medicine Partners

950 Warren Ave, Suite 104East Providence, RI 02914 Norman Chartier ([email protected]) MEDICAL ASSOC OF RI INC, WARREN AVE1180 Hope Street, Bristol, RI 02809 Norman Chartier ([email protected]) MEDICAL ASSOC OF RI INC, HOPE ST333 School Street, Suite 112, Pawtucket, RI 02860 Ahmad Al‐Raqqad ([email protected]) Nardone Medical Associates1539 Atwood Ave,Suite 101, Johnston, RI 02857 Frank Savoretti ([email protected]) OCEAN STATE MEDICAL LLC3461 South County Trail, Suite 203, East Greenwich, RI 02818 Richard Del Sesto ([email protected]) RICHARD DELSESTO MD360 Kingstown Rd, Suite 104, Narragansett, RI 02882 Monica Gross ([email protected]) SOUTH CTY PRIMARY CARE186 Providence St, West Warwick, RI 02893 Elizabeth Fortin ([email protected]) THUNDERMIST HEALTH CENTER‐WEST WARWICK1126 Hartford Avenue, Johnston, RI 02857 Matt Roman (mroman@tri‐town.org) TRI‐TOWN E.O.C.407 East Ave, Suite 120, Pawtucket, RI 02860 David Marcoux ([email protected]) UNIV INTERNAL MEDICINE17 Virginia Avenue, Providence, RI [email protected] UNIVERSITY MEDICINE‐909 N MAIN ST17 Virginia Avenue, Providence, RI [email protected] UNIVERSITY MEDICINE‐E PROVIDENCE‐BARRINGTON17 Virginia Avenue, Providence, RI [email protected] UNIVERSITY MEDICINE‐PAWTUCKET‐GERI17 Virginia Avenue, Providence, RI [email protected] University Medicine ‐ Plain Street17 Virginia Avenue, Providence, RI [email protected] UNIVERSITY MEDICINE‐WARWICK142A Daneilson Pike, Foster, RI 02825 Peter Bancroft ([email protected]) WELLONE ‐ FOSTER308 Callahan Road, North Kingstown, RI 02852 Peter Bancroft ([email protected]) WELLONE ‐ N KINGSTOWN36 Bridge Way, Pascoag, RI 02859 Peter Bancroft ([email protected]) WELLONE ‐ PASCOAG146 West River Street, Providence, RI 02904 Iris Tong ([email protected]) Womens Primary Care, Womens Medicine Collaborative

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Care Transformation Collaborative of RI Invoices - Page 1 of 4

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Current Care Invoices - Page 1 of 3

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Addendum B In accordance with the Rate Filing Instructions issued by the Office of Health Insurance

Commissioner, Blue Cross & Blue Shield of Rhode Island (“BCBSRI”) submits the following

description of the process used by BCBSRI to ensure compliance with segregation of fund

requirements in accordance with 45 C.F.R. § 156.280(e)(2).

1. Approved premium rates are loaded into BCBSRI’s premium billing system to reflect two

components of subscriber premium responsibility – abortion and non-abortion rates. In

addition, the Advanced Premium Tax Credit (APTC) is noted for subscribers approved for

APTCs. When a direct pay plan purchased through HealthSource RI (“HSRI”) is billed, the

billing system creates three distinct receivables: one for APTC, one for non-abortion

premiums, and one for abortion premiums. The APTC receivable portion can only be

satisfied by payments received from the federal government in accordance with 45 CFR

156.280(e)(1)(i). The remaining two portions of premium are satisfied by payments received

from HSRI on behalf of individual members in accordance with 45 CFR 156.280(e)(2)(i).

2. Upon receipt of a premium payment from HSRI, BCBSRI applies the payments to the

receivables for which each member is individually responsible: non-abortion and abortion.

The total amount applicable to the abortion receivable is then transferred from the general

operating bank account to a separate bank account. It is from this separate bank account that

all claims described in 45 CFR 156.280(d)(1) for direct pay members enrolled through HSRI

are paid in accordance with 45 CFR 156.280(e)(3)(ii)(B).

3. The amount of funds expected to be deposited into the segregated fund for plans purchased

through HSRI during the year 2015 is $ $174,771. The amount of $1.00 PMPM was applied

to on-exchange enrollment for January to April 2015 to calculate the total dollars deposited

into the segregated fund for that four-month period. To estimate the dollars to be deposited

for May to December 2015, membership of 14,564 per month was assumed at the same age

distribution, and was applied to the same $1.00 PMPM.

4. The total amount of abortion related charges incurred for plans sold through HSRI that are

expected to be charged against the fund is $8,739, or $0.05 PMPM. The total amount of

associated administrative fees incurred for on-exchange products is expected to be $18,441,

or $0.11 PMPM. Administrative fees are calculated by applying the administrative expense

load approved for the 2015 Direct Pay rate filing to the expected premium of $1.00 PMPM

for 2015.

5. The total amount of abortion related charges incurred for off-exchange products, is expected

to be $1,246, or $0.01 PMPM. The total amount of associated administrative fees incurred

for off-exchange products is expected to be $13,144, or $0.11 PMPM. Administrative fees

are calculated by applying the administrative expense load approved for the 2015 Direct Pay

rate filing to the expected premium of $1.00 PMPM for 2015.

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6. The funds expected to be deposited into the segregated fund during 2015 will be

expended or allocated as follows:

a. Claims for abortion services are identified by procedure code and systematically paid

to the healthcare provider that rendered the service (“Abortion Claim Payments”).

Abortion Claim Payments for Direct Pay members enrolled through HSRI are

disbursed from the separate bank account by BCBSRI’s Universal Claims

Disbursement System. The funds in this separate bank account are used solely to pay

for services described in 45 CFR 156.280(d)(1) for direct pay members enrolled

through HSRI in accordance with 45 CFR 156.280(e)(3)(ii)(B).

b. The segregated bank account and associated general ledger accounts are reconciled

monthly and reviewed by BCBSRI’s finance department management and

discrepancies are researched and resolved by BCBSRI’s finance department staff.

Standard controls related to financial accounting and reporting are also applicable to

the segregated fund accounts.

c. After a reasonable period of claims run-out, funds that were deposited into the

separate bank account for 2015 will be transferred to reserves in accordance with the

Report and Recommendation of the Hearing Officer, as adopted by the Order and

Decision of the Commissioner, in OHIC-2014-1 (dated July 16, 2014).

7. The amount of funds expected to be deposited into the segregated fund during 2016 was

calculated as follows:

a. The amount of funds expected to be deposited into the segregated fund during

2016 is $ $271,608.00 , or $1.00 PMPM.

b. This was calculated by estimating 459,648 member months for 2016 with fifty-

nine percent enrolled in plans purchased through HSRI which have abortion

coverage. This number was then multiplied by $1.00 PMPM.

8. The total amount of abortion related charges and associated administrative fees for plans

purchased through HSRI that are expected to be charged against the fund in 2016 are as

follows:

a. The total amount of abortion related charges for plans purchased through HSRI

that are expected to be charged against the fund is $ $13,580., or $0.05 PMPM.

b. The total amount of associated administrative fees for plans purchased through

HSRI that are expected to be charged against the fund is $ $29,320, or $0.11

PMPM. Administrative fees are calculated by applying the administrative expense

load proposed for the 2016 Direct Pay rate filing to the expected premium of

$1.00 PMPM for 2016.

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9. The funds expected to be deposited into the segregated fund during 2016 will be

expended or allocated as follows:

a. BCBSRI does not anticipate any changes to the process that is currently in place

in 2016. BCBSRI will evaluate any updates or changes to the federal regulations

and update the current process as necessary to ensure compliance with all

applicable regulations.

Based upon the information provided in this Addendum B, BCBSRI believes it fully complies

with section 1303 of the ACA and applicable regulations at 45 C.F.R. § 156.280.

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Actuarial Memorandum – Individual Market General Information Company Identifying Information

Company Legal Name: Blue Cross & Blue Shield of Rhode Island (“BCBSRI”)

State: Rhode Island

HIOS Issuer ID: 15287

Market: Individual

Effective Date: January 1, 2016

Company Contact Information

Primary Contact Name: Jeffrey McLane

Primary Contact Telephone Number: 401‐459‐5390

Primary Contact Email Address: [email protected]

Proposed Rate Increase(s) This filing is being made to establish new rates to be used effective January 1, 2016 for its portfolio of plans in the individual market. The RI Essential Health Benefit (“EHB”) rate increase is 18.0%, and the weighted average premium increase for the individual market is 11.0%. The actual rate impact on any given individual currently enrolled in an individual plan, however, will depend on the subscriber’s age (and the age of each dependent), the plan selected, and whether the individual is eligible for federal subsidies. The overall average increase is driven by a number of significant factors that are outlined below. Further details on each of these factors are given later in this memorandum. Claims Trend and Base Experience – Claims trends (both utilization and price) are projected to increase for 2016 when compared to 2014 claims. Operating Expense – The filing includes an inflation adjustment to 2015 approved operating expenses and a new charge for broker commissions.

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Base Modifications – The Affordable Care Act (“ACA”) is causing large changes in the population of the individual market. The base modification includes a lag factor adjustment. See the section entitled “Lag Factor Adjustment” for additional details. ACA Related Taxes and Fees – Rates must reflect a proposed Exchange User Fee, the Health Insurance Providers Fee, the Transitional Reinsurance Program Fee, the Patient‐Centered Outcomes Research Trust Fund Fee, and the fee for administration of the Risk Adjustment Program. Uncollected Premium‐ The filing includes an adjustment for unpaid premium. See the section entitled “Adjustment for Uncollected Premium” for additional details. Premium Stabilizers

The federal Transitional Reinsurance Program will provide payments in the individual market that will lower the overall increase needed for 2016 premium rates; however, due to the phase‐out of this program there is a marked decrease in the anticipated Reinsurance payments for 2016 as compared to 2015. This decrease produces a significant impact to the rate increase.

BCBSRI had nearly all the commercial individual market enrollment in 2014, and is using this experience to set 2016 rates. No assumptions for payments from the Risk Adjustment Program are reflected in this filing.

Experience Period Premium and Claims Paid Through Date The date through which payments have been made on claims incurred during the experience period is February 28, 2015. The experience period reflects all individual market claims. Premiums (net of MLR Rebate) in Experience Period The earned premium prior to MLR rebates for the calendar year 2014 experience period is $147,165,212. For the Individual market, earned premium prior to MLR rebates is the sum of premium of each member, excluding members who are charged $0 premium because they are dependents of a family with more than three children under the age of 21. The amount of MLR rebates refunded for the market during the experience period year 2014 is $0. Allowed and Incurred Claims During the Experience Period The amount of incurred claims processed through our claims system for the experience period 2014 is $136,228,367. The best estimate of experience period claims incurred but not paid as of the paid through date of February 28, 2015 is $1,735,954. The

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amount of incurred claims processed outside of our claims system is $1,530,032 , with an additional $3,304,089 included for state assessments as “Other Not Categorized.” The amount of allowed claims processed through our claims system for the experience

period 2014 is $169,580,388. The best estimate of experience period allowed claims

incurred but not paid as of the paid through date stated above is $2,001,606.

Allowed claims are developed by summing paid amount, coinsurance, co‐pay and deductible. In order to estimate claims incurred but not paid, lag triangles are created for each line of business (Inpatient, Outpatient, Medical/Surgical and Prescription Drugs) for the various market segments within commercial business. Three and six month averages based on paid claims experience for the last three years are used to calculate monthly multiplicative completion factors. Completion factors for the total commercial book of business are applied to base claims. Please refer to the attached appendix titled “Appendix A: Base Claims Development” for further details.

Benefit Categories OHIC Rate Review Template Inpatient services are those received during a patient's hospital stay, and these claims fall into the Inpatient Hospital category. Outpatient services are those that a member receives without being admitted to a hospital (e.g., X‐rays, lab tests, and some surgical procedures), and these claims fall into the Outpatient Hospital category. Primary care claims are routine healthcare services, including preventive care. The Other Medical/Surgical category represents all other claims for professional services that are not primary care. All retail/mail order pharmacy claims are included in the Prescription Drug category. The benefit category “Other Not Categorized” represents state assessments, which encompass adult immunizations, child immunizations and a children’s health account (used to fund various programs for children.) Unified Rate Review Template The benefit category “Professional” includes primary care claims and other claims for professional services, except for ambulance, home health care, durable medical equipment, prosthetics, supplies, vision exams, and dental services. The benefit category “Other Medical” includes these excluded services as well as state assessments. The benefit category “Prescription Drugs” is not adjusted to be net of rebates from drug manufacturers. Instead, drug rebates are included as an offset to Administrative

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Projection Factors Changes in the Morbidity of the Insured Population Lag Factor Adjustment For 2014 plans, the Rhode Island health insurance exchange had an open enrollment period of October 1, 2013 through March 31, 2014, which led to effective dates between January and May 2014. 45% of BCBSRI’s 2014 individual market membership consisted of new exchange enrollees that joined between these five months. After analyzing the claims experience for this population, there was a noticeable lag in allowed claims PMPM for this cohort for the first few enrolled months compared to the returning cohort and off‐exchange market. After this initial period, the claims of new members are similar those of the existing members. The first two months of claims for this new membership cohort was removed through the population adjustment, leaving the third month of experience and beyond in the projected period. A lag adjustment factor of was applied in the population risk/morbidity adjustment. Please refer to the attached appendix titled ”Appendix B: Population Risk/Other Adjustment” for further details. Changes in Benefits The “Adjustment to bring to Index Rate for Projection Period” represents additional benefits which are not reflected in base period claims on a comparable basis to the projected period because changes were made to the benefit during the base period. These include:

Anticipated increased utilization of preventive screenings for gestational diabetes, effective 1/1/2015.

The removal of cost sharing for the drugs Tamoxifen and Raloxifene, according to USPSTF recommendations, effective 10/1/2014.

A new benefit for medically necessary residential treatment for mental health disorders, effective 7/1/2014.

Changes in Demographics No adjustments were made to the demographics of the experience period claims.

Expenses.

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Utilization Trends Utilization projection factors were developed to project base period expenses to the rating period for expected changes in the number of services utilized by covered members (utilization) and changes in the types of services used (mix). Utilization/mix trend factors were developed separately for inpatient, outpatient, medical/surgical, and prescription drug services. The utilization/mix trend analysis used allowed claims pmpms for outpatient, medical/surgical, and prescription drug lines of business. For inpatient services, admissions per 1,000 members were analyzed to develop the projected utilization trend. A trend for inpatient case mix was developed separately. The utilization/mix trend analysis used allowed claims pmpms that were normalized for changes in claims costs that were due to influences other than utilization or mix. The data for outpatient and medical/surgical services were de‐priced to a common price level, namely January 2012. The trend data for all types of services was also normalized for the utilization effects due to cost sharing provisions of the benefit plans inherent in the data. This adjustment was made to remove the distortion caused by a change in the mix of plans over time. The projected impact due to these factors was developed and applied separately in the rate development. The data used for the prescription drug trend was normalized to remove the impact of changes in contractual terms with our Pharmacy Benefit Manager. The prescription drug trend data was also normalized to remove the anticipated effect of new brand name drugs, being introduced to the market, and the anticipated availability of new generic drugs as well as pricing changes associated with certain high impact drugs. The data points used in this analysis were 12‐month moving values, beginning with the period ending December 2012. Twenty‐five data points, equating to three years of experience, were analyzed. Trend lines were fit to a number of sets of data points utilizing the method of linear least squares, a statistical technique for quantifying trend levels. BCBSRI’s standard procedure is to determine the line that best fits the data points using the most recent 13 or more data points, generally with a minimum R‐squared value of 0.70 to help assure a reasonable fit to the data points. The principle of least squares states that the line of best fit to a series of observed values is the line where the sum of the squares of the deviations (the differences between the line and the actual values) are minimal, or the least possible. Given that the underlying data is credible, the annual trend indicated by the least squares line producing the best fit under this procedure is then selected as the basis for the trend assumption, provided the result is actuarially acceptable. Adjustment or modification to this result, or substitution of an alternative assumption, may occur if the original result is not credible, reasonable, or appropriate in our actuarial judgment. We reviewed the results of the regression analysis both by market segment and by all insured commercial. In order to increase credibility and decrease the volatility associated with market segment‐specific trend data, the trends selected are based on insured commercial market (Large Group, Small Group, and Individual) in total, and are used in all three market segments.

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For inpatient admissions per 1,000 members, the total commercial data produces a best fit line at ‐4.5% using 25 data points, and a latest 12 month trend of ‐1.9%. The graph shows a significant upturn beginning in August 2014. Based on the fact that over the past several years inpatient utilization has fluctuated between slight positive and slight negative trends, a 0% trend for inpatient was selected. For outpatient services, the comparable regression analysis produces a best fit trend indication of 1.9% using 25 data points; however, for this line of business the regression results for Small Group differ significantly from the other market segments. For Small Group, our regression analysis produces a best fit trend indication of ‐3.0% using 25 data points. Without a reasonable explanation for this deviation, we did not assign it full credibility. Instead, a utilization/mix trend of 2.3% was selected, representing the average of the 1.9% for total commercial and 2.7% for commercial excluding Small Group. Historically, a trend of 2.3% is still low for outpatient services. For medical/surgical services, the regression analysis produces a best fit trend of ‐1.6%

using 25 data points. In recognition of the significant upturn in the regression beginning

in August 2014, however, a utilization/mix trend of 0% was selected.

Finally, for prescription drug services, the regression analysis produces a best fit trend of

9.5% using 14 data points. This line of business yields high reliability with its r‐squared

values, so the indicated combined price and utilization trend of 9.5% was selected.

Price/Unit Cost Trends Price projection factors were developed for inpatient, outpatient, primary care services, and other professional services. These factors represent anticipated unit price increases during the 24 months from the experience period to the rating period. The price projection factors are based on actual unit cost increases, estimates of price increases based on negotiations, and any planned or estimated increases and adjustments to provider contracts. This information was provided by BCBSRI’s medical economics area. I have reviewed the information for reasonableness, but have not independently audited or otherwise verified the information provided. Other Adjustments An adjustment factor is included for the prescription drug line of business to adjust for changes in drug discounts associated with the Pharmacy Benefit Manager contract. The pharmacy adjustment factor also includes the anticipated impact of pipeline Specialty drugs used for treatment of Hepatitis C, Pulmonary Fibrosis, Cystic Fibrosis, and Cholesterol, as well as the impact of any new generic drugs expected to enter the market during the rating period.

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Credibility Manual Rate Development No manual rate was used.

Credibility of Experience Due to the size of the block in the experience period, no credibility adjustments were used.

Paid to Allowed Ratio The Paid‐to‐Allowed Ratio for 2016 is calculated to be the ratio between expected paid claims and expected allowed claims under 2016 benefit plans. Projected allowed claims (line 1) without state‐mandated assessments are converted to an expected paid basis by utilizing the 2014 paid‐to‐allowed factor adjusted for the effects of trend and benefit changes between the 2014 and 2016 product portfolios. For the calculation of the 2014 paid‐to‐allowed factor, the experience paid claims are decreased by the estimated federal cost‐sharing reduction settlement of $12,500,000. Please refer to the attached appendix titled “Appendix D: Calculation of Paid to Allowed Average Factor and 70% Utilization Factor in Projection Period” for further details.

Adjustment to Silver Utilization The 70% utilization adjustment in item 11 of Tab II, Rate Development, was calculated by taking a ratio of the projected 2016 paid‐to‐allowed ratio (see Paid to Allowed Ratio section) over our membership‐weighted proposed plan relativity factors for 2016 as detailed in appendix titled ”Appendix D:Net to Allowed”. The quotient of the two values minus 1 is the Adjustment to Silver Utilization (0.70AV) that is used in Tab II, Rate Development.

Percentage Adjustments Required in Tab II, Rate Development (Sections II and III) The percentage adjustments in Tab II, Rate Development are applied to the projected allowed claims pmpm and to the average required EHB pmpm. Note that the percentage values have been calculated so that they will produce the correct revenue when they are used in the development of projected rates.

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To determine the appropriate percentages, a projected medical premium pmpm was developed based on the expected plan distribution. The starting point was to convert projected allowed claims to an expected paid claims pmpm. (See Paid to Allowed Ratio section.) The fixed and variable retention components are then added onto the projected paid claims pmpm to determine the projected average medical premium pmpm. Please refer to the attached appendix titled “Appendix E: Calculation of Expected

Medical Premium” for further details.

Adjustment for Uncollected Premium In 2014, BCBSRI had 0.9% in uncollected premium in the individual market. This is the percentage of unpaid premium compared to the total earned premium for the year. Individual market members have a one‐month grace period for premium non‐payment during which BCBSRI continues to pay claims incurred during this month. BCBSRI is proposing to increase the overall required premium by 0.9% in anticipation of similar levels of non‐payment in 2016. This adjustment is applied to the projected medical premium PMPM. Please refer to the attached appendix titled “Appendix E: Appendix E: Calculation of Expected Medical Premium” for further details.

Risk Adjustment and Reinsurance Projected Risk Adjustments PMPM BCBSRI had nearly the entire individual market enrollment in its 2014 experience, and is assuming a similar market profile in 2016. Therefore, no assumptions for payments from the Risk Adjustment Program are reflected in this filing. A pmpm of $0.15 was included to reflect the risk adjustment fee, however. Projected ACA Reinsurance Recoveries Net of Reinsurance Premium (Individual Market and Combined Markets Only) For rate year 2014, the Transitional Reinsurance Program will reimburse insurers in the individual market for claims in excess of the attachment point of $45,000 at a coinsurance rate of 80%, up to a cap of $250,000 (calculated net of any cost‐sharing reduction (“CSR”) subsidies). Detailed claims data will be provided to CMS via the Edge Server and will be limited to payments made through April 2015. Inpatient admissions with discharge dates after December 31, 2014 will be part of the following year’s reinsurance calculations. BCBSRI’s reinsurance estimate is calculated at the member level using these parameters.

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For each member, total claims paid through December 2014 were completed and adjusted to exclude anticipated payments after April 30, 2015, as well as inpatient discharges after December 31, 2014. An adjustment was also made for members who are on a CSR plan to reflect the difference between their CSR out‐of‐pocket maximum and the corresponding standard plan out‐of‐pocket maximum. The net claims resulting after these adjustments were then applied against the Reinsurance parameters for 2014 to determine the estimated Reinsurance recoveries by member for the year. As part of the planned phase‐out of the program, for rate year 2016, the Transitional Reinsurance Program will reimburse insurers in the individual market for claims in excess of the attachment point of $90,000 at a coinsurance rate of 50%, up to a cap of $250,000 (calculated net of any cost sharing reduction subsidies). The 2016 reimbursement levels were calculated from the 2014 data mentioned above, with an adjustment for trend. Please refer to the attached appendix titled “Appendix F: Reinsurance Calculation” for further details. For 2016, the federal Transitional Reinsurance Program fee is $2.25 per member per month.

Non‐Benefit Expenses and Profit & Risk Administrative Expense Load BCBSRI creates its expense budget using current market segment allocation ratios and applying those allocations to the anticipated 2016 corporate budget. The corporate budget is based on projected expenses as determined by senior management. Adjustments are then made to reflect known changes, such as corporate project spend, enrollment shifts, etc. For 2016, a broker commission charge of $3.43 pmpm has been included in the administrative expense load.

Market segments can either be charged directly (e.g., 100% of expense is charged to the segment) or through an allocation where the expense is benefiting more than one segment. Each corporate area is allocated based on the function that is being performed (e.g., the Claims area would be allocated based on paid claims, Sales would be allocated based on contracts, etc.). These ratios are then used to distribute the particular area’s expenses to the market segment. Expenses exclude premium tax and expenses associated with the new core claim processing system because these components are reflected in separate rating factors. The market segment expenses are divided by projected enrollment for the same time period. To populate the template, the administrative expense pmpm is divided by the average premium pmpm in order to input as a percentage. This ensures we collect the appropriate expenses over the rating period.

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An anticipated pharmacy rebate of $2.09 pmpm is included as an offset to administrative expense. No investment credit is included in this filing. Formulas in Tab IV, Retention Charge were revised to reflect the average proposed retention charges. Profit (or Contribution to Surplus) & Risk Margin This filing includes a 3.00% contribution to corporate reserves, which includes the amortized costs of the core claim processing system. With the implementation of the ACA, the individual market has expanded significantly, so it is particularly important that market premiums not only cover medical and operating expenses, but also contribute toward the corporate reserves. Taxes and Fees The State of Rhode Island levies taxes of 2% on fully insured premium, including individual plans, pursuant to section 44‐17‐1 of the Rhode Island General Laws. As part of the ACA, the federal government imposes fees for the Transitional Reinsurance Program (section 1341 of the ACA), Patient‐Centered Outcomes Research Trust Fund (section 6301 of the ACA), the Risk Adjustment Program (section 1343 of the ACA), as well as the Health Insurance Providers Fee (section 9010 of the ACA). The aggregate Health Insurance Provider fee for 2016 is $11.3B. We estimate that BCBSRI’s portion will result in a fee amounting to 2.24% of premium. The 2016 annual per capita fee for the Transitional Reinsurance Program is $27 ($2.25 PMPM). The Patient‐Centered Outcomes Research Trust Fund annual per capita fee was $2.08 for the twelve months starting October 2014. For later years, this amount is indexed to health care cost inflation per the National Health Expenditures. We estimate the annual per capita fee to increase to $2.16 ($0.18 PMPM) for October 2015 and $2.26 ($0.18 PMPM) for October 2016. The 2016 annual per capita Risk Adjustment fee is $1.75 ($0.15 PMPM). The Fiscal Year 2016 Budget submitted by Governor Raimondo in March 2015 included a provision for a tax on individual market premiums to provide funding for HealthSource RI, the state’s health insurance exchange. This tax applies to premiums both on and off exchange. As instructed, we have included this proposed tax as an Exchange Fee in Tab II.

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Recovery of Assessments

Documentation of Payments

1Q2014 2Q2014 3Q2014 4Q2014 Total

Care Transformation Collaborative of RI

$1,189,711

$1,420,560

$1,815,876

$1,609,546 $6,035,693

Current Care $940,794 $13,782 $940,794 $0 $1,895,370

Total $2,130,50

5$1,434,34

2$2,756,67

0$1,609,54

6 $7,931,063

See attached invoices for further documentation of payments.

Recovery of Assessments in 2016 Rates

Payments to support the Care Transformation Collaborative of Rhode Island (“CTC,” formerly known as the Chronic Care Sustainability Initiative) and Current Care are included in the Out of System (“OOS”) factor for PCP and Other Professional. The OOS factor is applied to the experience period professional claims to account for these two programs along with risk sharing and Patient Centered Medical Home (PCMH) expenses that are not captured in the experience period claims. The calculations for the CTC and Current Care components of the OOS factors are displayed below. The OOS factors are included in Appendix A: Experience Period Claims Development in Section C. Out‐of‐System Liability Factor (Multiplicative) in the factors for PCP and Other Professional.

CTC Current Care

1. Total CY 2014 Payout $ 6,035,693 $ 1,895,370

2. % Allocated to Commercial 75.6% 100%

3. Total Commercial Dollars (L1 * L2) $ 4,563,775 $ 1,895,370

4. Total CY 2014 Commercial Allowed (Contracted Providers Only)

$413,354,364 $413,354,364

5. Estimated BlueCard Spend (%) 20% 20%

6. Allowed Including BlueCard (L4/(1 ‐ L5)) $516,692,954 $516,692,954

7. Net to Allowed (Based on Commercial) 0.81 0.81

8. Paid Dollars (L6 * L7) $418,243,396 $418,243,396

9. Final Factor (1 + L3/L8) 1.011 1.005


Payments to support CTC and Current Care are included in the OOS factor for PCP and

Other Professional. The OOS factor is applied to the experience period professional

claims to account for these two programs along with risk sharing and Patient Centered

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Medical Home (PCMH) expenses that are not captured in the experience period claims.

The calculations for the CTC and Current Care components of the OOS factors are

displayed below. The OOS factors are included in Appendix A: Claims Development

Exhibit for Actuarial Memorandum for 2015 Rate Filing, in Section C. Out‐of‐System

Liability Factor (Multiplicative) in the factors for PCP and Other Professional.

CTC Current Care

1. Total CY 2013 Payout $ 1,972,323 $ 3,204,000

2. % Allocated to Commercial 81.5% 81.5%



$421,443,010 $421,443,010




8. Paid Dollars (L6 * L7) $429,528,950 $429,528,950

9. Final Factor (1 + L3/L8) 1.004 1.006

Recovery of State Mandated Assessments in 2016 Rates

Childhood immunization, Adult immunization, and Children’s Health Account payments

are included in the proposed rates as State Mandated Assessments (SMA). Effective

January 1, 2016, the State of Rhode Island is changing the funding formula from a

percentage of fully insured premium for domestic carriers to a PMPM per Rhode Island

resident covered under a fully insured or self‐insured arrangement with a domestic or

foreign carrier. Self‐insured Municipalities are excluded from these fees, and Hospital

employer groups are not responsible for these fees until July 1, 2016.

Since the state has yet to provide the required funding amount for SMAs, and we only

have information on our own membership, we developed estimated 2016 PMPM

charges by applying the effects of the new statute to historical BCBSRI assessments,

with an assumption that BCBSRI’s membership reflects the rest of the market’s

membership in terms of proportion of members newly counted in calculating the fee.

We first converted our actual 2014 payments into their PMPM equivalent across the

expanded population base defined in the new law. This base is comprised of the Rhode

Island residents covered by us in CY2014 in the following categories:

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a) Domestic Fully Insured. These are BCBSRI’s members enrolled in Direct Pay, Small Group, and Large Group fully insured medical products (excluding Hospital enrollment).

b) Domestic Self‐Insured. These are BCBSRI’s members enrolled in Large Group self‐insured medical products (excluding Municipalities and Hospital enrollment).

c) Hospital. These are BCBSRI’s members enrolled through Hospital employers (since these employers are not responsible for the fees until July 1, 2016, only half of their enrollment was counted).

d) Foreign Carriers. These are individuals covered through other Blue Cross plans who reside in Rhode Island. While BCBSRI would not pay the SMA fees on behalf of these members, including them in the calculation allows us to approximate a proportion of members covered under the new law that we can then apply to obtain a PMPM per Rhode Island resident.

We then projected the CY2014 PMPM value we derived in this fashion to CY2016. To

project SMA payments in CY2014 to CY2016 for this rate filing, the annual trend

assumed reflected the average annual increase in BCBSRI’s aggregate SMA payments

since CY2011.

The calculation for this PMPM is displayed below. These PMPMs are included in OHIC

Rate Template, Part II, Section I, in the line, “Other Not Categorized.” The SMA PMPM

provided in the OHIC Rate Template is pro‐rated based on the percentage of Direct Pay’s

total members that reside in Rhode Island.

CY 2014 CY 2014 Annual CY 2016

Annual PMPM Cost (%) PMPM

Childhood immunization $10,812,278 N/A N/A N/A

Adult immunization $ 4,403,469 N/A N/A N/A

Children's Health Account $ 7,072,341 N/A N/A N/A

Total SMA Payments $22,288,088 N/A N/A N/A

Domestic Fully Insured (1) 1,629,887 N/A N/A N/A

Domestic Self‐Insured (2) 282,523 N/A N/A N/A

Hospital (3) 224,702 N/A N/A N/A

Foreign Carriers (4) 1,089,433 N/A N/A N/A

Total RI Members 3,226,545 $ 6.91 1.064(5) $ 7.82

RI % of Total(6) 99.1% $ 6.85 1.064(5) $ 7.75

(1) BCBSRI’s Rhode Island members enrolled in Direct Pay, Small Group, and Large

Group fully insured medical products (excluding Hospital enrollment)

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(2) BCBSRI’s Rhode Island members enrolled in Large Group self‐insured medical products (excluding Municipalities and Hospital enrollment)

(3) BCBSRI’s Rhode Island members enrolled through a Hospital employer. Since the fees are delayed for this population until July 1, 2016, this enrollment only reflects half of the total enrolled.

(4) Members covered through other Blue Cross plans that reside in Rhode Island. (5) The 6.4% annual cost is the expected annual increase for SMA on a PMPM basis.

This reflects the average increase since CY2011 for BCBSRI’s aggregate SMA payments.

(6) Percentage of Direct Pay’s total CY2014 members that resided in Rhode Island.

Projected Loss Ratio Our projected filed loss ratio in this filing, using the federally prescribed MLR methodology, is 83.9%.

Federal MLR Calculation

PMPM Gross Claims Expense (Incl. State Assessments) $338.45 State Assessments -$7.75 Rx Rebate -$2.09 Reinsurance Subsidy -$15.00 Quality Improvement Expenses $1.69 Total Net Claims & Quality Improvement $315.30 Gross Premium $427.29 State Premium Tax -$8.47 State Assessments -$7.75 Federal Taxes -$2.56 ACA Insurer Tax -$9.57 Risk Insurance Payments $0.00 Reinsurance Fee -$2.25 Risk Adjustment Fee -$0.15 PCORI Fee -$0.18 Exchange User Fee -$20.25 Regulatory Fees -$0.11 Total Net Premium $375.99 Federal MLR 83.9%

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Single Risk Pool The Single Risk Pool reflected in this rate filing includes all covered lives for every product/plan combination issued by BCBSRI in the individual market.

Index Rate The Index Rate represents the average allowed claims pmpm for Essential Health Benefits, excluding any adjustments for Exchange Fees, the Risk Adjustment and Transitional Reinsurance Programs. The difference between the Index Rate and the 2016 projected allowed claims expense is accounted for by the removal of excluded abortion claims and the addition of mandated benefits (see the subsection titled Changes in Benefits for more details). A description of our methodology is included elsewhere in the Actuarial Memorandum.

Market Adjusted Index Rates The Market Adjusted Index Rate represents the Index Rate adjusted for the Risk Adjustment Fee, Reinsurance Fee, and Exchange User Fee.

Plan Adjusted Index Rates The Plan Adjusted Index Rate represents the Market Adjusted Index Rate further adjusted to include administrative costs and plan‐specific factors such as utilization, cost sharing, provider network adjustments, adjustments for additional benefits, and the adjustment for uncollected premium. Plan Adjusted Index Rates reported in Tab III, Plan Rates reflect recoupment for the child dependent limit (a maximum of three dependents under the age of 21 are included in rates), whereas those reported in the Unified Rate Review Template do not. Please refer to the Unified Rate Review Template for further details.

Calibration ‐ Age Curve A projected weighted average age was calculated using the projected enrollment for 2016. The projection assumes enrollment that is consistent with the 2014 enrollment used in rating. The weighted average ACA age factor is 1.6876, which is approximately age [ 42 ].

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This age calibration includes an adjustment for the child dependent limit (a maximum of three dependents under the age of 21 are included in rates). Please refer to the attached appendix titled “Appendix C: Age Normalization” for further details.

Consumer Adjusted Premium Rate Consumer adjusted premium rates are calculated using the following equation:

Plan Adjusted Index Rate /Weighted Average ACA Age Factor (Age Curve Calibration) *

ACA Age Factor

AV Metal Values BCBSRI Acceptable Alternative Methodology for Valuing Plan Designs using the Actuarial Value Calculator Due to specific plan features and differences between underlying assumptions in the AV calculator and our plan designs, an acceptable alternative methodology was used to generate the AV metal values for some plans. The AV calculator was used to generate all AV values and metal levels; however we had to adjust the inputs to the calculator to appropriately reflect the plan designs of certain plans. The methodology used to develop inputs for the AV calculator is documented below. 1) 5‐tier Drug Benefit The AV calculator is set up for 4 tiers of drugs. For most of our plans, however, there are 5 tiers of drugs. In order to fit 5 tiers into the 4‐tier AV calculator, we took the first two tiers and accounted for them in Tier 1. We calculated the average copay for the first two tiers and entered that as the copay for Tier 1 drugs. All copays entered were rounded to the nearest dollar.

Tier 1 ‐ Low Cost

Tier 1 ‐ High Cost

Value Entered in AV Calculator for Tier 1

Weight 27% 73%

Copays $5 $15 $12

Copays $10 $20 $17

Copays $10 $25 $21

Copays $10 $30 $25

Copays $10 $35 $28

Copays $10 $40 $32

Copays $10 $50 $39

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AV Pricing Values BCBSRI develops plan relativity values used in rating through the use of a cost model. That model simulates the payment of medical and drug claims for a standard population for different plan cost sharing provisions. The model estimates plan payments by applying each plan’s deductibles, coinsurance, copays, and out of pocket maximums to the claims experience of the model’s standard population. Our cost model is built from the actual allowed claims incurred across our total commercial business (Individual, Small Group, and total Large Group) over a twelve‐month period, updated each year. This data is used to develop a claim probability distribution split by type of service, utilization and cost per service. Since it is well established that member cost‐sharing has an impact on the utilization of medical services, our methodology adjusts the utilization factor to the appropriate level based on the particular plan to be rated. We then re‐adjudicate the claims for that plan design. We make use of multiple data sources to develop and to keep up‐to‐date the assumptions built into our cost model. The foundation of our model was a rating manual purchased from a nationally known actuarial consulting firm. While we have largely retained that manual’s overall structure, the underlying claim costs and utilization assumptions are updated and re‐calibrated on an ongoing basis. We calibrate the utilization effects of different cost sharing levels by comparing our actual claim experience on different plan designs adjusted to remove the effects of health status selection. The process begins by examining our actual loss ratio experience by plan design for our Small Group block. We start there because we sell a broad range of standard plans to groups that are all community rated. The utilization differences we measure here are impacted not only by plan design features but also by health status differences among groups purchasing plans of different benefit richness. We remove the effects of these health status differences by adjusting the overall slope of our initially determined utilization differences in order to be synchronized with the utilization slope developed by performing the same exercise for our Large Group block of business for groups with a single benefit option. We assume that these cases are immune, or largely immune, to health status differences by plan design. We cannot base our utilization factor determination wholly on our Large Group experience because many of these groups have customized benefit designs. This makes it difficult for us to develop credible experience for any particular benefit plan. However by aggregating the experience of groups with similar plan designs we are able to determine a broad relationship between utilization rates and cost sharing levels which we believe allows us to remove selection effects from the more detailed analysis we are able to perform on our Small Group business. Final adjustments to the utilization assumptions in our

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pricing model are made based on actuarial judgment and comparisons with the pricing practices of other carriers.

RI Base Essential Health Benefit (EHB) Rate The RI Base EHB Rate is defined as the rate for a 21‐year old (age factor of 1.000) for 100% allowed dollars for EHB with a utilization assumption consistent with a plan with a 70% actuarial value. The calculation of the Base EHB rate starts with the Single Risk Pool Gross Premium Average Rate PMPM from Tab II, Rate Development. This is the average rate applicable to the benefits to be offered in the individual market in CY 2016. Three adjustments are made to this rate to convert it to the Base EHB Rate. First, an Average Benefit Factor is applied to convert the Gross Premium Average Rate to an allowed dollar basis. This factor also incorporates a utilization adjustment to bring the costs in line with a plan consistent with a 70% actuarial value. Second, a normalization factor is applied to convert the rate to be applicable to a 21‐year old (age factor of 1.000). This normalization factor reflects the current age distribution of the individual market portfolio and the federal default uniform age rating curve factors. Finally, the rate is adjusted to reflect the rating rules related to family composition. The premium for family coverage will be computed by adding the premiums for each member of a family, with the exception that only the three oldest children under age 21 shall be counted in developing a family premium. An adjustment must therefore be made to the Base EHB rate so that overall, the revenue collected from the proposed rates equates to the required revenue. This adjustment factor is calculated as the ratio of the revenue expected to be collected from the projected membership to the revenue that would be collected if premium were attributed to every family member.

Membership Projections Method of Analysis Membership Projections were calculated based on latest available membership data for February 2015 for the following individual market categories: member retained, and member loss. It is assumed that individual market enrollment will remain steady at 25,000 for May 2015 to December 2015, and it is assumed that an additional 13,000 new members will enroll for January 2016. Thus, for CY 2016, total projected members are 38,000 and total projected member months are 456,000. Projected members by product for 2016 are based on the actual distribution by product as of March 2015.

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Terminated Products

Following is a list of the products which will be terminated for 2016.

VantageBlue Direct 5800/11600

VantageBlue SelectRI Direct 500/1000

VantageBlue Select RI Direct 3000/6000


BasicBlue Direct

Plan Type Not applicable to the OHIC Rate Review Template.

Warning Alerts

Reliance In developing this rate filing I relied on information drawn from various areas within

BCBSRI, including Medical Economics, Legal, Strategic Marketing, Financial Forecasting

and Budgets. Such information included projections of provider price increases,

enrollment, and operating expenses. All this information was collected and conveyed to

me in accordance with our established methods and reviewed for reasonableness by

me. While I did not audit this data, I consider this information to be reliable. If the

underlying data or information is inaccurate or incomplete, the results of my analysis

may likewise be inaccurate or incomplete.

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Actuarial Memorandum – Individual Market General Information Company Identifying Information

Company Legal Name: Blue Cross & Blue Shield of Rhode Island (“BCBSRI”)

State: Rhode Island

HIOS Issuer ID: 15287

Market: Individual

Effective Date: January 1, 2016

Company Contact Information

Primary Contact Name: Jeffrey McLane

Primary Contact Telephone Number: 401‐459‐5390

Primary Contact Email Address: [email protected]

Proposed Rate Increase(s) This filing is being made to establish new rates to be used effective January 1, 2016 for its portfolio of plans in the individual market. The RI Essential Health Benefit (“EHB”) rate increase is 17.9% 18.0%, and the weighted average premium increase for the individual market is 10.9% 11.0%. The actual rate impact on any given individual currently enrolled in an individual plan, however, will depend on the subscriber’s age (and the age of each dependent), the plan selected, and whether the individual is eligible for federal subsidies. The overall average increase is driven by a number of significant factors that are outlined below. Further details on each of these factors are given later in this memorandum. Claims Trend and Base Experience – Claims trends (both utilization and price) are projected to increase for 2016 when compared to 2014 claims. Operating Expense – The filing includes an inflation adjustment to 2015 approved operating expenses and a new charge for broker commissions.

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Base Modifications – The Affordable Care Act (“ACA”) is causing large changes in the population of the individual market. The base modification includes a lag factor adjustment. See the section entitled “Lag Factor Adjustment” for additional details. ACA Related Taxes and Fees – Rates must reflect a proposed Exchange User Fee, the Health Insurance Providers Fee, the Transitional Reinsurance Program Fee, the Patient‐Centered Outcomes Research Trust Fund Fee, and the fee for administration of the Risk Adjustment Program. Uncollected Premium‐ The filing includes an adjustment for unpaid premium. See the section entitled “Adjustment for Uncollected Premium” for additional details. Premium Stabilizers

The federal Transitional Reinsurance Program will provide payments in the individual market that will lower the overall increase needed for 2016 premium rates; however, due to the phase‐out of this program there is a marked decrease in the anticipated Reinsurance payments for 2016 as compared to 2015. This decrease produces a significant impact to the rate increase.

BCBSRI had nearly all the commercial individual market enrollment in 2014, and is using this experience to set 2016 rates. No assumptions for payments from the Risk Adjustment Program are reflected in this filing.

Experience Period Premium and Claims Paid Through Date The date through which payments have been made on claims incurred during the experience period is February 28, 2015. The experience period reflects all individual market claims. Premiums (net of MLR Rebate) in Experience Period The earned premium prior to MLR rebates for the calendar year 2014 experience period is $147,165,212. For the Individual market, earned premium prior to MLR rebates is the sum of premium of each member, excluding members who are charged $0 premium because they are dependents of a family with more than three children under the age of 21. The amount of MLR rebates refunded for the market during the experience period year 2014 is $0. Allowed and Incurred Claims During the Experience Period The amount of incurred claims processed through our claims system for the experience period 2014 is $136,228,367. The best estimate of experience period claims incurred but not paid as of the paid through date of February 28, 2015 is $1,735,954. The

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amount of incurred claims processed outside of our claims system is $1,530,032 , with an additional $3,304,089 included for state assessments as “Other Not Categorized.” The amount of allowed claims processed through our claims system for the experience

period 2014 is $169,580,388. The best estimate of experience period allowed claims

incurred but not paid as of the paid through date stated above is $2,001,606.

Allowed claims are developed by summing paid amount, coinsurance, co‐pay and deductible. In order to estimate claims incurred but not paid, lag triangles are created for each line of business (Inpatient, Outpatient, Medical/Surgical and Prescription Drugs) for the various market segments within commercial business. Three and six month averages based on paid claims experience for the last three years are used to calculate monthly multiplicative completion factors. Completion factors for the total commercial book of business are applied to base claims. Please refer to the attached appendix titled “Appendix A: Base Claims Development” for further details.

Benefit Categories OHIC Rate Review Template Inpatient services are those received during a patient's hospital stay, and these claims fall into the Inpatient Hospital category. Outpatient services are those that a member receives without being admitted to a hospital (e.g., X‐rays, lab tests, and some surgical procedures), and these claims fall into the Outpatient Hospital category. Primary care claims are routine healthcare services, including preventive care. The Other Medical/Surgical category represents all other claims for professional services that are not primary care. All retail/mail order pharmacy claims are included in the Prescription Drug category. The benefit category “Other Not Categorized” represents state assessments, which encompass adult immunizations, child immunizations and a children’s health account (used to fund various programs for children.) Unified Rate Review Template The benefit category “Professional” includes primary care claims and other claims for professional services, except for ambulance, home health care, durable medical equipment, prosthetics, supplies, vision exams, and dental services. The benefit category “Other Medical” includes these excluded services as well as state assessments. The benefit category “Prescription Drugs” is not adjusted to be net of rebates from drug manufacturers. Instead, drug rebates are included as an offset to Administrative

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Projection Factors Changes in the Morbidity of the Insured Population Lag Factor Adjustment For 2014 plans, the Rhode Island health insurance exchange had an open enrollment period of October 1, 2013 through March 31, 2014, which led to effective dates between January and May 2014. 45% of BCBSRI’s 2014 individual market membership consisted of new exchange enrollees that joined between these five months. After analyzing the claims experience for this population, there was a noticeable lag in allowed claims PMPM for this cohort for the first few enrolled months compared to the returning cohort and off‐exchange market. After this initial period, the claims of new members are similar those of the existing members. The first two months of claims for this new membership cohort was removed through the population adjustment, leaving the third month of experience and beyond in the projected period. A lag adjustment factor of was applied in the population risk/morbidity adjustment. Please refer to the attached appendix titled ”Appendix B: Population Risk/Other Adjustment” for further details. Changes in Benefits The “Adjustment to bring to Index Rate for Projection Period” represents additional benefits which are not reflected in base period claims on a comparable basis to the projected period because changes were made to the benefit during the base period. These include:

Anticipated increased utilization of preventive screenings for gestational diabetes, effective 1/1/2015.

The removal of cost sharing for the drugs Tamoxifen and Raloxifene, according to USPSTF recommendations, effective 10/1/2014.

A new benefit for medically necessary residential treatment for mental health disorders, effective 7/1/2014.

Changes in Demographics No adjustments were made to the demographics of the experience period claims.

Expenses.

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Utilization Trends Utilization projection factors were developed to project base period expenses to the rating period for expected changes in the number of services utilized by covered members (utilization) and changes in the types of services used (mix). Utilization/mix trend factors were developed separately for inpatient, outpatient, medical/surgical, and prescription drug services. The utilization/mix trend analysis used allowed claims pmpms for outpatient, medical/surgical, and prescription drug lines of business. For inpatient services, admissions per 1,000 members were analyzed to develop the projected utilization trend. A trend for inpatient case mix was developed separately. The utilization/mix trend analysis used allowed claims pmpms that were normalized for changes in claims costs that were due to influences other than utilization or mix. The data for outpatient and medical/surgical services were de‐priced to a common price level, namely January 2012. The trend data for all types of services was also normalized for the utilization effects due to cost sharing provisions of the benefit plans inherent in the data. This adjustment was made to remove the distortion caused by a change in the mix of plans over time. The projected impact due to these factors was developed and applied separately in the rate development. The data used for the prescription drug trend was normalized to remove the impact of changes in contractual terms with our Pharmacy Benefit Manager. The prescription drug trend data was also normalized to remove the anticipated effect of new brand name drugs, being introduced to the market, and the anticipated availability of new generic drugs as well as pricing changes associated with certain high impact drugs. The data points used in this analysis were 12‐month moving values, beginning with the period ending December 2012. Twenty‐five data points, equating to three years of experience, were analyzed. Trend lines were fit to a number of sets of data points utilizing the method of linear least squares, a statistical technique for quantifying trend levels. BCBSRI’s standard procedure is to determine the line that best fits the data points using the most recent 13 or more data points, generally with a minimum R‐squared value of 0.70 to help assure a reasonable fit to the data points. The principle of least squares states that the line of best fit to a series of observed values is the line where the sum of the squares of the deviations (the differences between the line and the actual values) are minimal, or the least possible. Given that the underlying data is credible, the annual trend indicated by the least squares line producing the best fit under this procedure is then selected as the basis for the trend assumption, provided the result is actuarially acceptable. Adjustment or modification to this result, or substitution of an alternative assumption, may occur if the original result is not credible, reasonable, or appropriate in our actuarial judgment. We reviewed the results of the regression analysis both by market segment and by all insured commercial. In order to increase credibility and decrease the volatility associated with market segment‐specific trend data, the trends selected are based on insured commercial market (Large Group, Small Group, and Individual) in total, and are used in all three market segments.

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For inpatient admissions per 1,000 members, the total commercial data produces a best fit line at ‐4.5% using 25 data points, and a latest 12 month trend of ‐1.9%. The graph shows a significant upturn beginning in August 2014. Based on the fact that over the past several years inpatient utilization has fluctuated between slight positive and slight negative trends, a 0% trend for inpatient was selected. For outpatient services, the comparable regression analysis produces a best fit trend indication of 1.9% using 25 data points; however, for this line of business the regression results for Small Group differ significantly from the other market segments. For Small Group, our regression analysis produces a best fit trend indication of ‐3.0% using 25 data points. Without a reasonable explanation for this deviation, we did not assign it full credibility. Instead, a utilization/mix trend of 2.3% was selected, representing the average of the 1.9% for total commercial and 2.7% for commercial excluding Small Group. Historically, a trend of 2.3% is still low for outpatient services. For medical/surgical services, the regression analysis produces a best fit trend of ‐1.6%

using 25 data points. In recognition of the significant upturn in the regression beginning

in August 2014, however, a utilization/mix trend of 0% was selected.

Finally, for prescription drug services, the regression analysis produces a best fit trend of

9.5% using 14 data points. This line of business yields high reliability with its r‐squared

values, so the indicated combined price and utilization trend of 9.5% was selected.

Price/Unit Cost Trends Price projection factors were developed for inpatient, outpatient, primary care services, and other professional services. These factors represent anticipated unit price increases during the 24 months from the experience period to the rating period. The price projection factors are based on actual unit cost increases, estimates of price increases based on negotiations, and any planned or estimated increases and adjustments to provider contracts. This information was provided by BCBSRI’s medical economics area. I have reviewed the information for reasonableness, but have not independently audited or otherwise verified the information provided. Other Adjustments An adjustment factor is included for the prescription drug line of business to adjust for changes in drug discounts associated with the Pharmacy Benefit Manager contract. The pharmacy adjustment factor also includes the anticipated impact of pipeline Specialty drugs used for treatment of Hepatitis C, Pulmonary Fibrosis, Cystic Fibrosis, and Cholesterol, as well as the impact of any new generic drugs expected to enter the market during the rating period.

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Credibility Manual Rate Development No manual rate was used.

Credibility of Experience Due to the size of the block in the experience period, no credibility adjustments were used.

Paid to Allowed Ratio The Paid‐to‐Allowed Ratio for 2016 is calculated to be the ratio between expected paid claims and expected allowed claims under 2016 benefit plans. Projected allowed claims (line 1) without state‐mandated assessments are converted to an expected paid basis by utilizing the 2014 paid‐to‐allowed factor adjusted for the effects of trend and benefit changes between the 2014 and 2016 product portfolios. For the calculation of the 2014 paid‐to‐allowed factor, the experience paid claims are decreased by the estimated federal cost‐sharing reduction settlement of $12,500,000. Please refer to the attached appendix titled “Appendix D: Calculation of Paid to Allowed Average Factor and 70% Utilization Factor in Projection Period” for further details.

Adjustment to Silver Utilization The 70% utilization adjustment in item 11 of Tab II, Rate Development, was calculated by taking a ratio of the projected 2016 paid‐to‐allowed ratio (see Paid to Allowed Ratio section) over our membership‐weighted proposed plan relativity factors for 2016 as detailed in appendix titled ”Appendix D:Net to Allowed”. The quotient of the two values minus 1 is the Adjustment to Silver Utilization (0.70AV) that is used in Tab II, Rate Development.

Percentage Adjustments Required in Tab II, Rate Development (Sections II and III) The percentage adjustments in Tab II, Rate Development are applied to the projected allowed claims pmpm and to the average required EHB pmpm. Note that the percentage values have been calculated so that they will produce the correct revenue when they are used in the development of projected rates.

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To determine the appropriate percentages, a projected medical premium pmpm was developed based on the expected plan distribution. The starting point was to convert projected allowed claims to an expected paid claims pmpm. (See Paid to Allowed Ratio section.) The fixed and variable retention components are then added onto the projected paid claims pmpm to determine the projected average medical premium pmpm. Please refer to the attached appendix titled “Appendix E: Calculation of Expected

Medical Premium” for further details.

Adjustment for Uncollected Premium In 2014, BCBSRI had 0.9% in uncollected premium in the individual market. This is the percentage of unpaid premium compared to the total earned premium for the year. Individual market members have a one‐month grace period for premium non‐payment during which BCBSRI continues to pay claims incurred during this month. BCBSRI is proposing to increase the overall required premium by 0.9% in anticipation of similar levels of non‐payment in 2016. This adjustment is applied to the projected medical premium PMPM. Please refer to the attached appendix titled “Appendix E: Appendix E: Calculation of Expected Medical Premium” for further details.

Risk Adjustment and Reinsurance Projected Risk Adjustments PMPM BCBSRI had nearly the entire individual market enrollment in its 2014 experience, and is assuming a similar market profile in 2016. Therefore, no assumptions for payments from the Risk Adjustment Program are reflected in this filing. A pmpm of $0.15 was included to reflect the risk adjustment fee, however. Projected ACA Reinsurance Recoveries Net of Reinsurance Premium (Individual Market and Combined Markets Only) For rate year 2014, the Transitional Reinsurance Program will reimburse insurers in the individual market for claims in excess of the attachment point of $45,000 at a coinsurance rate of 80%, up to a cap of $250,000 (calculated net of any cost‐sharing reduction (“CSR”) subsidies). Detailed claims data will be provided to CMS via the Edge Server and will be limited to payments made through April 2015. Inpatient admissions with discharge dates after December 31, 2014 will be part of the following year’s reinsurance calculations. BCBSRI’s reinsurance estimate is calculated at the member level using these parameters.

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For each member, total claims paid through December 2014 were completed and adjusted to exclude anticipated payments after April 30, 2015, as well as inpatient discharges after December 31, 2014. An adjustment was also made for members who are on a CSR plan to reflect the difference between their CSR out‐of‐pocket maximum and the corresponding standard plan out‐of‐pocket maximum. The net claims resulting after these adjustments were then applied against the Reinsurance parameters for 2014 to determine the estimated Reinsurance recoveries by member for the year. As part of the planned phase‐out of the program, for rate year 2016, the Transitional Reinsurance Program will reimburse insurers in the individual market for claims in excess of the attachment point of $90,000 at a coinsurance rate of 50%, up to a cap of $250,000 (calculated net of any cost sharing reduction subsidies). The 2016 reimbursement levels were calculated from the 2014 data mentioned above, with an adjustment for trend. Please refer to the attached appendix titled “Appendix F: Reinsurance Calculation” for further details. For 2016, the federal Transitional Reinsurance Program fee is $2.25 per member per month.

Non‐Benefit Expenses and Profit & Risk Administrative Expense Load BCBSRI creates its expense budget using current market segment allocation ratios and applying those allocations to the anticipated 2016 corporate budget. The corporate budget is based on projected expenses as determined by senior management. Adjustments are then made to reflect known changes, such as corporate project spend, enrollment shifts, etc. For 2016, a broker commission charge of $3.43 pmpm has been included in the administrative expense load.

Market segments can either be charged directly (e.g., 100% of expense is charged to the segment) or through an allocation where the expense is benefiting more than one segment. Each corporate area is allocated based on the function that is being performed (e.g., the Claims area would be allocated based on paid claims, Sales would be allocated based on contracts, etc.). These ratios are then used to distribute the particular area’s expenses to the market segment. Expenses exclude premium tax and expenses associated with the new core claim processing system because these components are reflected in separate rating factors. The market segment expenses are divided by projected enrollment for the same time period. To populate the template, the administrative expense pmpm is divided by the average premium pmpm in order to input as a percentage. This ensures we collect the appropriate expenses over the rating period.

10

An anticipated pharmacy rebate of $2.09 pmpm is included as an offset to administrative expense. No investment credit is included in this filing. Formulas in Tab IV, Retention Charge were revised to reflect the average proposed retention charges. Profit (or Contribution to Surplus) & Risk Margin This filing includes a 3.00% contribution to corporate reserves, which includes the amortized costs of the core claim processing system. With the implementation of the ACA, the individual market has expanded significantly, so it is particularly important that market premiums not only cover medical and operating expenses, but also contribute toward the corporate reserves. Taxes and Fees The State of Rhode Island levies taxes of 2% on fully insured premium, including individual plans, pursuant to section 44‐17‐1 of the Rhode Island General Laws. As part of the ACA, the federal government imposes fees for the Transitional Reinsurance Program (section 1341 of the ACA), Patient‐Centered Outcomes Research Trust Fund (section 6301 of the ACA), the Risk Adjustment Program (section 1343 of the ACA), as well as the Health Insurance Providers Fee (section 9010 of the ACA). The aggregate Health Insurance Provider fee for 2016 is $11.3B. We estimate that BCBSRI’s portion will result in a fee amounting to 2.24% of premium. The 2016 annual per capita fee for the Transitional Reinsurance Program is $27 ($2.25 PMPM). The Patient‐Centered Outcomes Research Trust Fund annual per capita fee was $2.08 for the twelve months starting October 2014. For later years, this amount is indexed to health care cost inflation per the National Health Expenditures. We estimate the annual per capita fee to increase to $2.16 ($0.18 PMPM) for October 2015 and $2.26 ($0.18 PMPM) for October 2016. The 2016 annual per capita Risk Adjustment fee is $1.75 ($0.15 PMPM). The Fiscal Year 2016 Budget submitted by Governor Raimondo in March 2015 included a provision for a tax on individual market premiums to provide funding for HealthSource RI, the state’s health insurance exchange. This tax applies to premiums both on and off exchange. As instructed, we have included this proposed tax as an Exchange Fee in Tab II.

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Recovery of Assessments

Documentation of Payments

1Q2014 2Q2014 3Q2014 4Q2014 Total

Care Transformation Collaborative of RI

$1,189,711

$1,420,560

$1,815,876

$1,609,546 $6,035,693

Current Care $940,794 $13,782 $940,794 $0 $1,895,370

Total $2,130,50

5$1,434,34

2$2,756,67

0$1,609,54

6 $7,931,063

See attached invoices for further documentation of payments.


Payments to support the Care Transformation Collaborative of Rhode Island (“CTC,” formerly known as the Chronic Care Sustainability Initiative) and Current Care are included in the Out of System (“OOS”) factor for PCP and Other Professional. The OOS factor is applied to the experience period professional claims to account for these two programs along with risk sharing and Patient Centered Medical Home (PCMH) expenses that are not captured in the experience period claims. The calculations for the CTC and Current Care components of the OOS factors are displayed below. The OOS factors are included in Appendix A: Experience Period Claims Development in Section C. Out‐of‐System Liability Factor (Multiplicative) in the factors for PCP and Other Professional.

CTC Current Care

1. Total CY 2014 Payout $ 6,035,693 $ 1,895,370

2. % Allocated to Commercial 75.6% 100%



$413,354,364 $413,354,364




8. Paid Dollars (L6 * L7) $418,243,396 $418,243,396

9. Final Factor (1 + L3/L8) 1.011 1.005


Payments to support CTC and Current Care are included in the OOS factor for PCP and

Other Professional. The OOS factor is applied to the experience period professional

claims to account for these two programs along with risk sharing and Patient Centered

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Medical Home (PCMH) expenses that are not captured in the experience period claims.

The calculations for the CTC and Current Care components of the OOS factors are

displayed below. The OOS factors are included in Appendix A: Claims Development

Exhibit for Actuarial Memorandum for 2015 Rate Filing, in Section C. Out‐of‐System

Liability Factor (Multiplicative) in the factors for PCP and Other Professional.

CTC Current Care

1. Total CY 2013 Payout $ 1,972,323 $ 3,204,000

2. % Allocated to Commercial 81.5% 81.5%



$421,443,010 $421,443,010




8. Paid Dollars (L6 * L7) $429,528,950 $429,528,950

9. Final Factor (1 + L3/L8) 1.004 1.006

Recovery of State Mandated Assessments in 2016 Rates

Childhood immunization, Adult immunization, and Children’s Health Account payments

are included in the proposed rates as State Mandated Assessments (SMA). Effective

January 1, 2016, the State of Rhode Island is changing the funding formula from a

percentage of fully insured premium for domestic carriers to a PMPM per Rhode Island

resident covered under a fully insured or self‐insured arrangement with a domestic or

foreign carrier. Self‐insured Municipalities are excluded from these fees, and Hospital

employer groups are not responsible for these fees until July 1, 2016.

Since the state has yet to provide the required funding amount for SMAs, and we only

have information on our own membership, we developed estimated 2016 PMPM

charges by applying the effects of the new statute to historical BCBSRI assessments,

with an assumption that BCBSRI’s membership reflects the rest of the market’s

membership in terms of proportion of members newly counted in calculating the fee.

We first converted our actual 2014 payments into their PMPM equivalent across the

expanded population base defined in the new law. This base is comprised of the Rhode

Island residents covered by us in CY2014 in the following categories:

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a) Domestic Fully Insured. These are BCBSRI’s members enrolled in Direct Pay, Small Group, and Large Group fully insured medical products (excluding Hospital enrollment).

b) Domestic Self‐Insured. These are BCBSRI’s members enrolled in Large Group self‐insured medical products (excluding Municipalities and Hospital enrollment).

c) Hospital. These are BCBSRI’s members enrolled through Hospital employers (since these employers are not responsible for the fees until July 1, 2016, only half of their enrollment was counted).

d) Foreign Carriers. These are individuals covered through other Blue Cross plans who reside in Rhode Island. While BCBSRI would not pay the SMA fees on behalf of these members, including them in the calculation allows us to approximate a proportion of members covered under the new law that we can then apply to obtain a PMPM per Rhode Island resident.

We then projected the CY2014 PMPM value we derived in this fashion to CY2016. To

project SMA payments in CY2014 to CY2016 for this rate filing, the annual trend

assumed reflected the average annual increase in BCBSRI’s aggregate SMA payments

since CY2011.

The calculation for this PMPM is displayed below. These PMPMs are included in OHIC

Rate Template, Part II, Section I, in the line, “Other Not Categorized.” The SMA PMPM

provided in the OHIC Rate Template is pro‐rated based on the percentage of Direct Pay’s

total members that reside in Rhode Island.

CY 2014 CY 2014 Annual CY 2016

Annual PMPM Cost (%) PMPM

Childhood immunization $10,812,278 N/A N/A N/A

Adult immunization $ 4,403,469 N/A N/A N/A

Children's Health Account $ 7,072,341 N/A N/A N/A

Total SMA Payments $22,288,088 N/A N/A N/A

Domestic Fully Insured (1) 1,629,887 N/A N/A N/A

Domestic Self‐Insured (2) 282,523 N/A N/A N/A

Hospital (3) 224,702 N/A N/A N/A

Foreign Carriers (4) 1,089,433 N/A N/A N/A

Total RI Members 3,226,545 $ 6.91 1.064(5) $ 7.82

RI % of Total(6) 99.1% $ 6.85 1.064(5) $ 7.75

(1) BCBSRI’s Rhode Island members enrolled in Direct Pay, Small Group, and Large

Group fully insured medical products (excluding Hospital enrollment)

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(2) BCBSRI’s Rhode Island members enrolled in Large Group self‐insured medical products (excluding Municipalities and Hospital enrollment)

(3) BCBSRI’s Rhode Island members enrolled through a Hospital employer. Since the fees are delayed for this population until July 1, 2016, this enrollment only reflects half of the total enrolled.

(4) Members covered through other Blue Cross plans that reside in Rhode Island. (5) The 6.4% annual cost is the expected annual increase for SMA on a PMPM basis.

This reflects the average increase since CY2011 for BCBSRI’s aggregate SMA payments.

(6) Percentage of Direct Pay’s total CY2014 members that resided in Rhode Island.

Projected Loss Ratio Our projected filed loss ratio in this filing, using the federally prescribed MLR methodology, is 83.9%.

Federal MLR CalculationPMPM

Gross Claims Expense (Incl. State Assessments) $340.79State Assessments -$7.75Rx Rebate -$2.09Reinsurance Subsidy -$15.00Quality Improvement Expenses $1.70Total Net Claims & Quality Improvement $317.65

Gross Premium $429.96State Premium Tax -$8.52State Assessments -$7.75Federal Taxes -$2.58ACA Insurer Tax -$9.63Risk Insurance Payments $0.00Reinsurance Fee -$2.25Risk Adjustment Fee -$0.15PCORI Fee -$0.18User Exchange Fee -$20.38Regulatory Fees -$0.11Total Net Premium $378.41Federal MLR 83.9%

Federal MLR Calculation

PMPM Gross Claims Expense (Incl. State Assessments) $338.45 State Assessments -$7.75 Rx Rebate -$2.09

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Reinsurance Subsidy -$15.00 Quality Improvement Expenses $1.69 Total Net Claims & Quality Improvement $315.30 Gross Premium $427.29 State Premium Tax -$8.47 State Assessments -$7.75 Federal Taxes -$2.56 ACA Insurer Tax -$9.57 Risk Insurance Payments $0.00 Reinsurance Fee -$2.25 Risk Adjustment Fee -$0.15 PCORI Fee -$0.18 Exchange User Fee -$20.25 Regulatory Fees -$0.11 Total Net Premium $375.99 Federal MLR 83.9%

Single Risk Pool The Single Risk Pool reflected in this rate filing includes all covered lives for every product/plan combination issued by BCBSRI in the individual market.

Index Rate The Index Rate represents the average allowed claims pmpm for Essential Health Benefits, excluding any adjustments for Exchange Fees, the Risk Adjustment and Transitional Reinsurance Programs. The difference between the Index Rate and the 2016 projected allowed claims expense is accounted for by the removal of excluded abortion claims and the addition of mandated benefits (see the subsection titled Changes in Benefits for more details). A description of our methodology is included elsewhere in the Actuarial Memorandum.

Market Adjusted Index Rates The Market Adjusted Index Rate represents the Index Rate adjusted for the Risk Adjustment Fee, Reinsurance Fee, and Exchange User Fee.

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Plan Adjusted Index Rates The Plan Adjusted Index Rate represents the Market Adjusted Index Rate further adjusted to include administrative costs and plan‐specific factors such as utilization, cost sharing, provider network adjustments, adjustments for additional benefits, and the adjustment for uncollected premium. Plan Adjusted Index Rates reported in Tab III, Plan Rates reflect recoupment for the child dependent limit (a maximum of three dependents under the age of 21 are included in rates), whereas those reported in the Unified Rate Review Template do not. Please refer to the Unified Rate Review Template for further details.

Calibration ‐ Age Curve A projected weighted average age was calculated using the projected enrollment for 2016. The projection assumes enrollment that is consistent with the 2014 enrollment used in rating. The weighted average ACA age factor is 1.6876, which is approximately age [ 42 ]. This age calibration includes an adjustment for the child dependent limit (a maximum of three dependents under the age of 21 are included in rates). Please refer to the attached appendix titled “Appendix C: Age Normalization” for further details.

Consumer Adjusted Premium Rate Consumer adjusted premium rates are calculated using the following equation:

Plan Adjusted Index Rate /Weighted Average ACA Age Factor (Age Curve Calibration) *

ACA Age Factor

AV Metal Values BCBSRI Acceptable Alternative Methodology for Valuing Plan Designs using the Actuarial Value Calculator Due to specific plan features and differences between underlying assumptions in the AV calculator and our plan designs, an acceptable alternative methodology was used to generate the AV metal values for some plans. The AV calculator was used to generate all

17

AV values and metal levels; however we had to adjust the inputs to the calculator to appropriately reflect the plan designs of certain plans. The methodology used to develop inputs for the AV calculator is documented below. 1) 5‐tier Drug Benefit The AV calculator is set up for 4 tiers of drugs. For most of our plans, however, there are 5 tiers of drugs. In order to fit 5 tiers into the 4‐tier AV calculator, we took the first two tiers and accounted for them in Tier 1. We calculated the average copay for the first two tiers and entered that as the copay for Tier 1 drugs. All copays entered were rounded to the nearest dollar.

Tier 1 ‐ Low Cost

Tier 1 ‐ High Cost

Value Entered in AV Calculator for Tier 1

Weight 27% 73%

Copays $5 $15 $12

Copays $10 $20 $17

Copays $10 $25 $21

Copays $10 $30 $25

Copays $10 $35 $28

Copays $10 $40 $32

Copays $10 $50 $39

AV Pricing Values BCBSRI develops plan relativity values used in rating through the use of a cost model. That model simulates the payment of medical and drug claims for a standard population for different plan cost sharing provisions. The model estimates plan payments by applying each plan’s deductibles, coinsurance, copays, and out of pocket maximums to the claims experience of the model’s standard population. Our cost model is built from the actual allowed claims incurred across our total commercial business (Individual, Small Group, and total Large Group) over a twelve‐month period, updated each year. This data is used to develop a claim probability distribution split by type of service, utilization and cost per service. Since it is well established that member cost‐sharing has an impact on the utilization of medical services, our methodology adjusts the utilization factor to the appropriate level based on the particular plan to be rated. We then re‐adjudicate the claims for that plan design. We make use of multiple data sources to develop and to keep up‐to‐date the assumptions built into our cost model. The foundation of our model was a rating manual purchased from a nationally known actuarial consulting firm. While we have

18

largely retained that manual’s overall structure, the underlying claim costs and utilization assumptions are updated and re‐calibrated on an ongoing basis. We calibrate the utilization effects of different cost sharing levels by comparing our actual claim experience on different plan designs adjusted to remove the effects of health status selection. The process begins by examining our actual loss ratio experience by plan design for our Small Group block. We start there because we sell a broad range of standard plans to groups that are all community rated. The utilization differences we measure here are impacted not only by plan design features but also by health status differences among groups purchasing plans of different benefit richness. We remove the effects of these health status differences by adjusting the overall slope of our initially determined utilization differences in order to be synchronized with the utilization slope developed by performing the same exercise for our Large Group block of business for groups with a single benefit option. We assume that these cases are immune, or largely immune, to health status differences by plan design. We cannot base our utilization factor determination wholly on our Large Group experience because many of these groups have customized benefit designs. This makes it difficult for us to develop credible experience for any particular benefit plan. However by aggregating the experience of groups with similar plan designs we are able to determine a broad relationship between utilization rates and cost sharing levels which we believe allows us to remove selection effects from the more detailed analysis we are able to perform on our Small Group business. Final adjustments to the utilization assumptions in our pricing model are made based on actuarial judgment and comparisons with the pricing practices of other carriers.

RI Base Essential Health Benefit (EHB) Rate The RI Base EHB Rate is defined as the rate for a 21‐year old (age factor of 1.000) for 100% allowed dollars for EHB with a utilization assumption consistent with a plan with a 70% actuarial value. The calculation of the Base EHB rate starts with the Single Risk Pool Gross Premium Average Rate PMPM from Tab II, Rate Development. This is the average rate applicable to the benefits to be offered in the individual market in CY 2016. Three adjustments are made to this rate to convert it to the Base EHB Rate. First, an Average Benefit Factor is applied to convert the Gross Premium Average Rate to an allowed dollar basis. This factor also incorporates a utilization adjustment to bring the costs in line with a plan consistent with a 70% actuarial value. Second, a normalization factor is applied to convert the rate to be applicable to a 21‐year old (age factor of 1.000). This normalization factor reflects the current age distribution of the individual market portfolio and the federal default uniform age rating curve factors. Finally, the rate is adjusted to reflect the rating rules related to family composition. The premium for family coverage will be computed by adding the premiums for each member of a family, with the exception that only the three oldest children under age 21

19

shall be counted in developing a family premium. An adjustment must therefore be made to the Base EHB rate so that overall, the revenue collected from the proposed rates equates to the required revenue. This adjustment factor is calculated as the ratio of the revenue expected to be collected from the projected membership to the revenue that would be collected if premium were attributed to every family member.

Membership Projections Method of Analysis Membership Projections were calculated based on latest available membership data for February 2015 for the following individual market categories: member retained, and member loss. It is assumed that individual market enrollment will remain steady at 25,000 for May 2015 to December 2015, and it is assumed that an additional 13,000 new members will enroll for January 2016. Thus, for CY 2016, total projected members are 38,000 and total projected member months are 456,000. Projected members by product for 2016 are based on the actual distribution by product as of March 2015.

Terminated Products

Following is a list of the products which will be terminated for 2016.



VantageBlue Select RI Direct 3000/6000


BasicBlue Direct

Plan Type Not applicable to the OHIC Rate Review Template.

Warning Alerts

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Reliance In developing this rate filing I relied on information drawn from various areas within BCBSRI, including Medical Economics, Legal, Strategic Marketing, Financial Forecasting and Budgets. Such information included projections of provider price increases, enrollment, and operating expenses. All this information was collected and conveyed to me in accordance with our established methods and reviewed for reasonableness by me. While I did not audit this data, I consider this information to be reliable. If the underlying data or information is inaccurate or incomplete, the results of my analysis may likewise be inaccurate or incomplete.

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Actuarial Certification I, Jeffrey McLane, am a member in good standing, of the American Academy of Actuaries and meet the Academy qualification standards for rendering this opinion. To the best of my knowledge and judgment, the projected Index Rate in the OHIC Rate Review Template was developed in compliance with all applicable State and Federal statutes and regulations, in particular 45 CFR 156.80(d)(1) and in compliance with applicable Actuarial Standards of Practice. It is my opinion that the Index Rate is reasonable in relation to the benefits proposed to be offered and the population anticipated to be covered, and is neither excessive nor deficient. Plan level rates were developed using only the Index Rate and allowable modifiers as described in 45 CFR 156.80(d)(1) and 45 CFR 156.80(d)(2). The percent of total premium that represents Essential Health Benefits included in Worksheet 2, Sections III and IV of the OHIC Template were calculated in accordance with actuarial standards of practice. The Federal AV calculator was used to generate all AV values and metal levels. As documented in this memorandum, certain inputs to the calculator were adjusted to appropriately reflect the plan designs. The Part I Unified Rate Review Template does not demonstrate the exact process used to develop rates. Rather it represents information required by federal regulation to be provided in support of the review of rate increases and for certification that the Index Rate is developed in accordance with federal regulation and used consistently and that it is only adjusted by the allowable modifiers. __________________________ _____________ Signature of Actuary Date

A. On-system Claims

Paid Allowed

Incurred Inpatient Outpatient PCP

Other

Professional Rx Other Claims Inpatient Outpatient PCP

Other

Professional Rx Other Claims1/1/2014 $2,161,565 $1,528,682 $332,858 $1,304,331 $1,069,427 0.0000 $2,420,980 $2,328,056 $473,497 $2,456,933 $1,485,991 0.0000

2/1/2014 $2,938,354 $1,870,768 $344,768 $1,503,868 $1,246,334 0.0000 $3,096,517 $2,523,379 $479,550 $2,508,299 $1,633,511 0.0000

3/1/2014 $2,587,058 $2,447,243 $449,955 $2,037,614 $1,715,464 0.0000 $2,793,436 $3,141,163 $608,302 $3,186,286 $2,110,061 0.0000

4/1/2014 $2,981,612 $2,985,291 $521,973 $2,479,632 $1,900,887 0.0000 $3,152,275 $3,752,783 $698,518 $3,673,266 $2,329,560 0.0000

5/1/2014 $2,979,030 $3,030,461 $552,301 $2,655,935 $2,200,886 0.0000 $3,128,764 $3,854,468 $734,503 $3,876,020 $2,669,964 0.0000

6/1/2014 $3,315,851 $3,339,801 $566,607 $2,695,873 $2,318,612 0.0000 $3,477,264 $4,140,819 $727,473 $3,823,505 $2,732,775 0.0000

7/1/2014 $3,602,792 $3,512,846 $563,005 $2,866,810 $2,461,024 0.0000 $3,764,895 $4,195,786 $715,282 $3,922,876 $2,876,514 0.0000

8/1/2014 $3,207,649 $3,527,177 $540,148 $2,777,637 $2,528,871 0.0000 $3,343,195 $4,118,942 $676,672 $3,720,192 $2,915,970 0.0000

9/1/2014 $3,662,865 $3,630,805 $595,996 $3,038,905 $2,533,310 0.0000 $3,835,742 $4,226,257 $738,900 $4,005,982 $2,907,793 0.0000

10/1/2014 $3,347,688 $4,100,304 $624,090 $3,388,110 $2,531,454 0.0000 $3,480,595 $4,690,065 $771,123 $4,417,418 $2,953,984 0.0000

11/1/2014 $2,552,344 $3,345,647 $536,053 $2,863,531 $2,369,192 0.0000 $2,693,134 $3,840,315 $655,169 $3,707,531 $2,750,727 0.0000

12/1/2014 $3,497,075 $3,521,536 $587,450 $3,143,872 $2,707,141 0.0000 $3,627,179 $4,084,781 $722,385 $3,968,892 $3,122,194 0.0000

B. IBNR Adjustment (Divisional)

Paid Allowed


Other


Other

Professional Rx Other Claims1/1/2014 0.9996 0.9997 0.9992 0.9992 1.0000 1.0000 0.9996 0.9997 0.9992 0.9992 1.0000 1.0000

2/1/2014 0.9999 0.9994 0.9990 0.9990 1.0000 1.0000 0.9999 0.9994 0.9990 0.9990 1.0000 1.0000

3/1/2014 0.9870 0.9995 0.9984 0.9984 1.0000 1.0000 0.9870 0.9995 0.9984 0.9984 1.0000 1.0000

4/1/2014 0.9988 0.9982 0.9977 0.9977 1.0000 1.0000 0.9988 0.9982 0.9977 0.9977 1.0000 1.0000

5/1/2014 0.9899 0.9956 0.9968 0.9968 1.0000 1.0000 0.9899 0.9956 0.9968 0.9968 1.0000 1.0000

6/1/2014 1.0242 0.9949 0.9948 0.9948 1.0000 1.0000 1.0242 0.9949 0.9948 0.9948 1.0000 1.0000

7/1/2014 0.9993 0.9937 0.9932 0.9932 1.0000 1.0000 0.9993 0.9937 0.9932 0.9932 1.0000 1.0000

8/1/2014 0.9951 0.9928 0.9911 0.9911 1.0000 1.0000 0.9951 0.9928 0.9911 0.9911 1.0000 1.0000

9/1/2014 0.9873 0.9900 0.9868 0.9868 0.9999 1.0000 0.9873 0.9900 0.9868 0.9868 0.9999 1.0000

10/1/2014 0.9766 0.9842 0.9802 0.9802 0.9999 1.0000 0.9766 0.9842 0.9802 0.9802 0.9999 1.0000

11/1/2014 0.9478 0.9745 0.9703 0.9703 0.9998 1.0000 0.9478 0.9745 0.9703 0.9703 0.9998 1.0000

12/1/2014 0.8824 0.9505 0.9485 0.9485 0.9997 1.0000 0.8824 0.9505 0.9485 0.9485 0.9997 1.0000

C. Out-of-System Liability Factor (Mulitplicative)


Other


Other

Professional Rx Other ClaimsCY 2014 1.0005 1.0005 1.0398 1.0398 1.0000 1.0000 1.0005 1.0005 1.0398 1.0398 1.0000 1.0000

D. Total CY 2014 Claims Liability [(A/B)*C]

Paid Allowed


Other


Other

Professional Rx Other Claims1/1/2014 $2,163,511 $1,529,906 $346,383 $1,357,330 $1,069,427 $0 $2,423,160 $2,329,919 $492,736 $2,556,764 $1,485,991 $0

2/1/2014 $2,940,118 $1,872,827 $358,848 $1,565,287 $1,246,334 $0 $3,098,375 $2,526,157 $499,135 $2,610,740 $1,633,511 $0

3/1/2014 $2,622,443 $2,449,691 $468,613 $2,122,107 $1,715,464 $0 $2,831,644 $3,144,306 $633,526 $3,318,410 $2,110,061 $0

4/1/2014 $2,986,687 $2,992,170 $543,998 $2,584,265 $1,900,887 $0 $3,157,640 $3,761,430 $727,993 $3,828,267 $2,329,560 $0

5/1/2014 $3,010,930 $3,045,376 $576,126 $2,770,506 $2,200,886 $0 $3,162,267 $3,873,438 $766,188 $4,043,224 $2,669,964 $0

6/1/2014 $3,239,122 $3,358,600 $592,238 $2,817,821 $2,318,612 $0 $3,396,800 $4,164,126 $760,380 $3,996,462 $2,732,775 $0

7/1/2014 $3,607,118 $3,536,885 $589,420 $3,001,318 $2,461,024 $0 $3,769,416 $4,224,498 $748,843 $4,106,934 $2,876,514 $0

8/1/2014 $3,225,055 $3,554,533 $566,690 $2,914,122 $2,528,871 $0 $3,361,337 $4,150,888 $709,921 $3,902,992 $2,915,970 $0

9/1/2014 $3,711,837 $3,669,313 $628,006 $3,202,122 $2,533,563 $0 $3,887,025 $4,271,081 $778,585 $4,221,139 $2,908,084 $0

10/1/2014 $3,429,615 $4,168,212 $662,037 $3,594,121 $2,531,708 $0 $3,565,774 $4,767,741 $818,010 $4,686,014 $2,954,279 $0

11/1/2014 $2,694,261 $3,434,910 $574,449 $3,068,638 $2,369,666 $0 $2,842,879 $3,942,776 $702,097 $3,973,092 $2,751,277 $0

12/1/2014 $3,965,122 $3,706,782 $643,996 $3,446,493 $2,707,953 $0 $4,112,639 $4,299,657 $791,920 $4,350,927 $3,123,131 $0

Blue Cross and Blue Shield of Rhode Island

Appendix A: Base Claims Development

for 2016 Individual Market Rate Filing


Appendix B: Population Risk/Other Adjustmentfor 2016 Individual Market Rate Filing

Lag Factor Adjustment

CY 2014 Base Period Member

MonthsCY 2014 Base Period PMPM

Adjusted Member Months

PMPM Adjusted for

Lag

Individual Market Members 400,238 $423.70 357,725 $430.95DP + Retained HSRI 220,488 $431.06 220,488 $431.06New Members 179,750 $414.67 137,237 $430.77Impact of Lag Factor 1.0171

1.0171

Uncollected Premium Adjustment

Direct Pay Uncollected $803,388

HSRI Uncollected $571,458

Total Individual Market $147,165,212

Uncollected Premium Adjustment 1.0093


Appendix C: Age Normalization

for Individual Market CY 2016 Rating

Age ACA Age Factor Member Months

0 0.635 1,433

1 0.635 1,370 ACA Age Normalization Factor 1.6876

2 0.635 1,350

3 0.635 1,538 Over 3 children under 21 years old 781

4 0.635 1,393 All Other 399,457

5 0.635 1,672 Member Months 400,238

6 0.635 1,641 >3 child children under 21 adjustment 99.80%

7 0.635 1,834

8 0.635 2,082

9 0.635 2,008

10 0.635 2,276

11 0.635 2,183

12 0.635 2,235

13 0.635 2,117

14 0.635 2,278

15 0.635 2,672

16 0.635 2,581

17 0.635 2,401

18 0.635 2,577

19 0.635 4,959

20 0.635 5,509

21 1 5,552

22 1 5,350

23 1 4,767

24 1 4,628

25 1.004 4,415

26 1.024 8,254

27 1.048 8,018

28 1.087 7,154

29 1.119 6,454

30 1.135 5,981

31 1.159 6,097

32 1.183 6,564

33 1.198 5,879

34 1.214 5,671

35 1.222 5,710

36 1.23 5,825

37 1.238 5,471

38 1.246 5,163

39 1.262 5,422

40 1.278 5,560

41 1.302 5,733

42 1.325 6,461

43 1.357 7,127

44 1.397 7,262

45 1.444 7,523

46 1.5 7,674

47 1.563 7,991

48 1.635 8,599

49 1.706 9,364

50 1.786 9,274

51 1.865 9,718

52 1.952 9,478

53 2.04 9,397

54 2.135 9,723

55 2.23 10,680

56 2.333 11,311

57 2.437 11,127

58 2.548 10,804

59 2.603 11,313

60 2.714 11,326

61 2.81 11,138

62 2.873 12,460

63 2.952 13,397

64 3 12,432

65 3 726

66 3 262

67 3 346

68 3 136

69 3 141

70 3 128

71 3 161

72 3 142

73 3 92

74 3 64

75 3 81

76 3 74

77 3 30

78 3 58

79 3 1

80 3 45

81 3 45

82 3 29

83 3 28

84 3 39

85 3 35

86 3 42

87 3 33

88 3 45

89 3 22

90 3 19

91 3 11

92 3 20

93 3 11

98 3 3

99 3 3

100 3 10


Appendix D: Calculation of Paid to Allowed Average Factor and 70% Utilization Factor in Projection Period

1. Allowed Claims PMPM 470.35$ 2. State-Mandated Assessments 7.75$ 3. 2016 Projected Allowed PMPM 478.10$

4. 2014 Actual Net to Allowed 0.74895. 2-Year Paid Leveraging Factor 1.01676. 2016 Expected Net to Allowed 0.76147. 2016 Expected Paid under current benefit design $358.11

8. Average 2014 Benefit Factor Relative to 70% Silver 0.70519. Average 2016 EHB Benefit Factor Relative to 70% Silver 0.6512

10. Benefit Adjustment 0.9235

11. 2016 Expected Paid under EHB Benefit Design $338.45

12. 2016 Paid-to-Allowed Factor (line 12 divided by line 3) 0.7079

13. 70% Silver Plan Utilization Adjustment 0.0871

2016 EHB Benefit FactorProjected Relative to

Exchange Metallic Member 70% SilverOffering Level Plan Name Distribution PlanOn/Off Gold VantageBlue Direct 1000/2000 WPD 3,077 0.8619

Off Gold VantageBlue Direct 1000/2000 WOPD 1,847 0.8599On/Off Silver VantageBlue Direct 3000/6000 WPD 3,881 0.7210

Off Silver VantageBlue Direct 3000/6000 WOPD 1,194 0.7189Off Gold VantageBlue Direct Embedded Dental 1200/2400 1,000 0.8432

On/Off Gold BlueSolutions for HSA Direct 1400/2800 WPD 2,403 0.7910Off Gold BlueSolutions for HSA Direct 1400/2800 WOPD 300 0.7890

On/Off Bronze BlueSolutions for HSA Direct 3700/7400 WPDA 254 0.5164Off Bronze BlueSolutions for HSA Direct 3700/7400 WOPDA 153 0.5144

On/Off Silver BlueSolutions for HSA Direct 3900/7800 WPD 4,846 0.5853Off Silver BlueSolutions for HSA Direct 3900/7800 WOPD 123 0.5833

On/Off Bronze BlueSolutions for HSA Direct 5350/10700 WPD 5,944 0.5020Off Bronze BlueSolutions for HSA Direct 5350/10700 WOPD 1,054 0.5000

On/Off Gold BasicBlue Direct WPD 2750/5500 2,403 0.7553Off Gold BasicBlue Direct WOPD 2750/5500 300 0.7533

On/Off Silver BasicBlue Direct WPD 4900/9800 2,403 0.5989Off Silver BasicBlue Direct WOPD 4900/9800 801 0.5969

On/Off Bronze BasicBlue Direct WPD 6850/13700 1,202 0.4996Off Bronze BasicBlue Direct WOPD 6850/13700 150 0.4975

On/Off Silver BlueCHiP Direct 4500/9000 WPD 4,846 0.5640Off Silver BlueCHiP Direct 4500/9000 WOPD 123 0.5621

On/Off Bronze BasicBlue Direct WPD 6850/13700 0 0.4996Off Bronze BasicBlue Direct WOPD 6850/13700 0 0.4975

On/Off Gold VantageBlue Direct 1000/2000 WPD 0 0.8619Off Gold VantageBlue Direct 1000/2000 WOPD 0 0.8599

On/Off Silver VantageBlue Direct 3000/6000 WPD 0 0.7210Off Silver VantageBlue Direct 3000/6000 WOPD 0 0.7189

On/Off Bronze BasicBlue Direct WPD 6850/13700 0 0.4996Off Bronze BasicBlue Direct WOPD 6850/13700 0 0.4975

On/Off Catastrophic BasicBlue Direct WPD 6850/13700 0 0.4996Off Catastrophic BasicBlue Direct WOPD 6850/13700 0 0.4975

Total 38,304 0.6512


Projected Claims PMPMProjected Allowed Claims $478.04

Mandated Benefits $0.11Abortion Claims -$0.04

Allowed Adjustment $0.07Total Allowed Claims $478.10Paid to Allowed Factor 0.7079

Paid Claims Before Risk Adjustment/Reinsurance $338.45Reinsurance Recovery -$15.00

Risk Adjuster $0.15Paid Claims $323.60

Projected Retention PMPM % PremiumAdmin $46.59 11.01% PMPM

Reinsurance Fee $2.25 0.53% PMPMPCORI $0.18 0.04% PMPM

Premium Tax $8.47 2.00% %Health Insurer Tax $9.48 2.24% %Investment Income $0.00 0.00% %

Contribution to Reserves $12.70 3.00% %Exchange User Fee $20.07 4.74% %

Other Taxes $0.00 0.00% %Total After Claims $99.74 23.56%

EHB Projected Premium $423.33 100.00%


Appendix E: Calculation of Expected Medical Premiumfor Individual Market CY 2016 Rating


Appendix F: Reinsurance Calculation


Case 2016 2016 Min

# Claims Reinsurance 90,000$

1 $577,594.81 $80,000.00 Max

2 $535,035.88 $80,000.00 250,000$

3 $519,626.85 $80,000.00 Cost Share Rate

4 $494,400.28 $80,000.00 50%

5 $487,070.34 $80,000.00

6 $471,728.25 $80,000.00

7 $450,030.64 $80,000.00

8 $412,821.99 $80,000.00

9 $389,484.76 $80,000.00

10 $377,268.90 $80,000.00

11 $355,613.80 $80,000.00

12 $337,966.89 $80,000.00

13 $337,090.23 $80,000.00

14 $336,036.11 $80,000.00

15 $324,111.41 $80,000.00

16 $319,598.47 $80,000.00

17 $317,681.50 $80,000.00

18 $316,839.91 $80,000.00

19 $293,793.84 $80,000.00

20 $288,208.72 $80,000.00

21 $283,732.97 $80,000.00

22 $283,284.54 $80,000.00

23 $280,760.82 $80,000.00

24 $271,644.62 $80,000.00

25 $264,755.66 $80,000.00

26 $259,615.78 $80,000.00

27 $259,515.89 $80,000.00

28 $251,074.45 $80,000.00

29 $246,618.89 $78,309.44

30 $241,827.54 $75,913.77

31 $237,919.23 $73,959.62

32 $228,433.23 $69,216.62

33 $225,902.08 $67,951.04

34 $222,893.80 $66,446.90

35 $220,070.43 $65,035.21

36 $218,521.13 $64,260.56

37 $215,698.81 $62,849.41

38 $214,897.60 $62,448.80

39 $206,174.56 $58,087.28

40 $205,111.95 $57,555.97

41 $203,836.80 $56,918.40

42 $198,942.38 $54,471.19

43 $197,842.57 $53,921.29

44 $195,179.65 $52,589.82

45 $190,293.73 $50,146.86

46 $187,553.24 $48,776.62

47 $187,233.39 $48,616.69

48 $187,017.68 $48,508.84

49 $186,873.16 $48,436.58

50 $185,967.81 $47,983.90

51 $184,400.45 $47,200.22

52 $183,453.65 $46,726.83

53 $177,047.13 $43,523.56

54 $176,101.40 $43,050.70

55 $175,860.18 $42,930.09

56 $174,706.18 $42,353.09

57 $174,228.00 $42,114.00

58 $174,076.05 $42,038.02

59 $171,695.78 $40,847.89

60 $171,626.71 $40,813.35

61 $171,187.85 $40,593.92

62 $170,984.89 $40,492.44

63 $170,105.04 $40,052.52

64 $169,071.11 $39,535.56

65 $168,206.14 $39,103.07

66 $165,634.60 $37,817.30

67 $165,281.81 $37,640.91

68 $164,482.73 $37,241.36

69 $163,798.40 $36,899.20

70 $163,582.69 $36,791.34

71 $161,331.00 $35,665.50

72 $161,111.04 $35,555.52

73 $160,727.43 $35,363.72

74 $160,536.16 $35,268.08

75 $159,997.41 $34,998.71

76 $159,640.37 $34,820.19

77 $154,738.51 $32,369.26

78 $154,199.77 $32,099.88

79 $150,915.21 $30,457.61

80 $147,788.99 $28,894.49

81 $146,104.74 $28,052.37

82 $144,064.51 $27,032.25

83 $143,954.00 $26,977.00

84 $142,750.05 $26,375.03

85 $142,084.85 $26,042.43

86 $142,060.41 $26,030.21

87 $141,791.57 $25,895.78

88 $138,873.62 $24,436.81

89 $138,214.79 $24,107.40

90 $134,962.12 $22,481.06

91 $133,909.06 $21,954.53

92 $133,810.24 $21,905.12

93 $133,700.79 $21,850.40

94 $133,245.99 $21,623.00

95 $132,795.44 $21,397.72

96 $131,897.53 $20,948.76

97 $131,850.77 $20,925.39

98 $129,499.20 $19,749.60

99 $127,874.45 $18,937.23

100 $127,156.12 $18,578.06

101 $126,718.32 $18,359.16

102 $126,354.91 $18,177.45

103 $125,859.73 $17,929.86

104 $125,281.66 $17,640.83

105 $123,567.66 $16,783.83

106 $123,529.41 $16,764.70

107 $122,530.54 $16,265.27

108 $122,435.97 $16,217.99

109 $122,359.46 $16,179.73

110 $121,284.09 $15,642.05

111 $121,224.59 $15,612.29

112 $121,087.51 $15,543.75

113 $120,720.91 $15,360.45

114 $119,896.31 $14,948.16

115 $119,896.31 $14,948.16

116 $119,680.60 $14,840.30

117 $119,582.84 $14,791.42

118 $119,152.48 $14,576.24

119 $119,146.10 $14,573.05

120 $118,613.73 $14,306.87

121 $118,360.83 $14,180.41

122 $117,754.07 $13,877.04

123 $117,500.11 $13,750.05

124 $117,479.92 $13,739.96

125 $117,364.09 $13,682.05

126 $117,170.70 $13,585.35

127 $116,829.60 $13,414.80

128 $116,472.56 $13,236.28

129 $116,189.90 $13,094.95

130 $114,845.69 $12,422.84

131 $114,646.98 $12,323.49

132 $113,916.96 $11,958.48

133 $113,540.79 $11,770.40

134 $113,065.80 $11,532.90

135 $112,609.94 $11,304.97

136 $112,112.63 $11,056.32

137 $111,188.86 $10,594.43

138 $110,885.31 $10,442.65

139 $110,632.40 $10,316.20

140 $110,041.59 $10,020.79

141 $110,032.03 $10,016.01

142 $109,385.95 $9,692.98

143 $108,592.18 $9,296.09

144 $108,501.85 $9,250.93

145 $107,708.08 $8,854.04

146 $107,591.19 $8,795.60

147 $107,521.06 $8,760.53

148 $107,317.04 $8,658.52

149 $106,468.00 $8,234.00

150 $105,324.63 $7,662.31

151 $104,785.88 $7,392.94

152 $104,700.87 $7,350.43

153 $104,531.91 $7,265.96

154 $103,589.37 $6,794.68

155 $103,525.61 $6,762.81

156 $103,050.62 $6,525.31

157 $102,213.28 $6,106.64

158 $101,893.43 $5,946.72

159 $101,823.30 $5,911.65

160 $100,797.87 $5,398.94

161 $100,142.23 $5,071.12

162 $100,097.60 $5,048.80

163 $99,707.62 $4,853.81

164 $99,567.36 $4,783.68

165 $99,549.29 $4,774.65

166 $99,430.28 $4,715.14

167 $99,126.37 $4,563.19

168 $99,039.24 $4,519.62

169 $99,038.17 $4,519.09

170 $98,737.45 $4,368.73

171 $98,633.32 $4,316.66

172 $98,422.92 $4,211.46

173 $97,982.99 $3,991.50

174 $97,603.64 $3,801.82

175 $97,602.58 $3,801.29

176 $96,786.49 $3,393.24

177 $96,519.77 $3,259.88

178 $96,085.16 $3,042.58

179 $95,970.39 $2,985.20

180 $95,804.63 $2,902.31

181 $95,732.37 $2,866.18

182 $95,637.79 $2,818.90

183 $94,688.88 $2,344.44

184 $94,599.62 $2,299.81

185 $94,337.15 $2,168.57

186 $94,023.68 $2,011.84

187 $93,196.96 $1,598.48

188 $93,068.38 $1,534.19

189 $92,985.50 $1,492.75

190 $92,890.93 $1,445.46

191 $92,585.95 $1,292.98

192 $92,483.94 $1,241.97

193 $92,320.30 $1,160.15

194 $91,997.26 $998.63

195 $91,911.19 $955.60

196 $91,878.25 $939.13

197 $91,756.05 $878.02

198 $91,570.09 $785.05

199 $91,497.83 $748.92

200 $91,218.36 $609.18

201 $90,869.83 $434.91

202 $90,352.33 $176.16

203 $90,322.58 $161.29

204 $90,213.13 $106.56

*** 2-yr price trend applied to 2014 reinsurance data

Reinsurance Member Months 2016 PMPM

2014 Estimate using 2016 Parameters $6,005,399 400,238 $15.00

A1 Incurred and Paid

Calendar Year ExperiencePaid Through

DateInpatient Days/1000 Total

Inpatient Hospital Outpatient Hospital Primary Care Other Med/Surg

Prescription Drugs Capitation

Claims not Otherwise categorized (explain)

CY 2012 2/28/2013 415.36 62,978,626$ 18,532,020$ 13,076,202$ 2,691,483$ 12,973,107$ 14,357,746$ ‐$ 1,348,068$ CY 2013 2/28/2014 331.79 64,273,146$ 17,518,564$ 15,358,394$ 2,939,433$ 12,909,625$ 13,741,037$ ‐$ 1,806,093$ CY 2014 2/28/2015 322.04 139,532,456$ 36,833,885$ 36,840,562$ 6,215,203$ 30,756,118$ 25,582,600$ ‐$ 3,304,089$

A2 Completed and Incurred

Calendar Year Experience Member Months Earned Premium TotalInpatient Hospital Outpatient Hospital Primary Care Other Med/Surg


Claims not Otherwise categorized (explain) Loss Ratio

Investment Income Credit

Contribution to Reserves

CY 2012 187,247 68,167,816$ 64,453,295$ 19,263,832$ 13,065,431$ 3,310,563$ 13,094,672$ 14,370,729$ ‐$ 1,348,068$ 94.5% ‐$ (8,374,795)$ CY 2013 200,621 69,326,768$ 66,141,976$ 18,200,970$ 15,627,056$ 3,692,982$ 13,055,071$ 13,759,804$ ‐$ 1,806,093$ 95.4% (228,000)$ (8,010,265)$ CY 2014 400,238 147,165,212$ 142,798,441$ 37,595,820$ 37,319,206$ 6,550,805$ 32,444,129$ 25,584,392$ ‐$ 3,304,089$ 97.0% (7,000)$ 11,280,000$

A3 Allowed

Calendar Year Experience TotalInpatient Hospital Outpatient Hospital Primary Care Other Med/Surg


Claims not Otherwise categorized

CY 2012 84,314,762$ 20,942,770$ 17,818,988$ 4,321,121$ 21,579,256$ 18,304,559$ ‐$ 1,348,068$ CY 2013 86,756,970$ 20,022,679$ 20,966,371$ 4,697,112$ 22,001,194$ 17,263,521$ ‐$ 1,806,093$ CY 2014 172,884,477$ 39,608,956$ 45,456,017$ 8,429,335$ 45,594,964$ 30,491,115$ ‐$ 3,304,089$

B Average Rate Increase ComponentsShould reconcile with rate increase for 21 year old EHB rate, 0% cost sharing, silver utilization Calculation of Weights

Claims Category Part IAssumed Weight Cost Utilization,Other Total Claims Category

Index Rate PMPM % Distribution

Inpatient Hospital 18.0% 0.6% 0.0% 0.6% Inpatient Hospital $107.58 18.0%Outpatient Hospital 21.3% 0.6% 0.5% 1.1% Outpatient Hospital $127.68 21.3%Primary Care 4.0% 0.2% 0.0% 0.2% Primary Care $23.81 4.0%Other Medical/Surgical 20.0% 0.3% 0.0% 0.3% Other Medical/Surgical $119.82 20.0%Prescription Drug 15.3% 0.0% 1.5% 1.5% Prescription Drug $91.48 15.3%Capitation 0.0% 0.0% 0.0% 0.0% Capitation $0.00 0.0%Other Not Categorized 1.3% 0.0% 0.0% 0.0% Other Not Categorized $7.75 1.3%Total Projected Claims 79.9% 3.7% Total Projected Claims $478.11 79.9%

Adjustments & Retention Part IIAssumed Weight

CY 2015 Adjustment

CY 2016 Adjustment Total Adjustments & Retention Part PMPM % Distribution

Population Risk Adjustment 79.9% 0.0% 0.0% 0.00%Other Adjustment 79.9% 0.2% 0.0% ‐0.1%Risk Adjustment 0.0% 0.0% 0.0% Risk Adjustment $0.21 0.0%Reinsurance ‐9.3% ‐3.0% 6.9% Reinsurance ‐$18.02 ‐3.0%Exchange User Fee 0.0% 4.7% 4.7% Exchange User Fee $28.35 4.7%Admin Expense Load 10.6% 11.0% 0.4% Administrative Expense Load $65.82 11.0%ACA Taxes & Fees 2.3% 2.3% 0.0% ACA Fees and Taxes $13.65 2.3%Premium Tax 2.0% 2.0% 0.0% Premium Tax $11.96 2.0%Other Retention Charge 0.5% 0.0% ‐0.5% Other Retention Charge $0.00 0.0%Contribution to Reserve 3.0% 3.0% 0.0% Contribution to Reserve $17.94 3.0%Investment Income Credit 0.0% 0.0% 0.0% Investment Income Credit $0.00 0.0%Prior Period Adjustment (+/‐) 1.8% Retention $109.37 18.3%Total 18.0% Total Theoretical Rate $598.02

1/1/2016 EHB 21 year old rate increase 18.0%

C Enrollment Statistics

Age Category 31‐Dec‐13 31‐Dec‐14 31-Mar-15<18 2,454 3,082 2,837 18‐24 1,557 2,858 2,035 25‐29 1,396 2,951 2,085 30‐34 1,016 2,738 1,821 35‐39 776 2,605 1,611 40‐44 957 2,948 1,836 45‐49 1,367 3,675 2,420 50‐54 1,719 4,323 3,052 55‐59 2,643 5,959 4,345

Membership Enrollment

Rate Template Part IData and Explanation of Rate Increase

Rate Template Part IIRate Development

Company Legal Name: Blue Cross & Blue Shield of RI State: RIHIOS Issuer ID: Market: IndividualEffective Date: 1/1/2016

Experience Period: 1/1/2014 to 12/31/2014

Section I: Index Rate for Projection PeriodExperience Period Projection Period: 1/1/2016 to 12/31/2016 Mid-point to Mid-point, Experience to Projection: 24 months

on Actual Experience AllowedAdj't. from Experience to

Projection Period Projections, before credibility Adjustment Credibility Manual

Benefit Category Utilization DescriptionUtilization per

1,000Average

Cost/Service PMPMPop'l risk Morbidity Other Cost Util & Other

Utilization per 1,000

Average Cost/Service PMPM



Inpatient Hospital admit/days 327.61 3,624.95$ 98.96$ 1.017 1.000 1.034 1.000 333.21 3,873.62 107.56$ -$ Outpatient Hospital services 2,116.51 643.92$ 113.57$ 1.017 1.000 1.028 1.023 2,252.89 679.96 127.66 - Primary Care services 1,515.03 166.81$ 21.06$ 1.017 1.000 1.054 1.000 1,540.96 185.36 23.80 - Other Medical/Surgical services 8,923.02 153.20$ 113.92$ 1.017 1.000 1.017 1.000 9,075.72 158.40 119.80 - Prescription Drug scripts 13,710.08 66.68$ 76.18$ 1.017 0.985 1.000 1.095 16,720.05 65.65$ 91.47$ - Capitation - 1.00 1.000 1.000 1.000 1.000 1.00 - - - - - Other Not Categorized - 1.00 155.18$ 8.26$ 1.000 0.939 1.000 1.000 1.00 145.71 7.75 ‐ Total 431.95$ 478.04$ - -$

PMPM % Adjustment(1) Projected Allowed Experience Claims PMPM (w/applied credibility if applicable) 100% 0% $478.04

(2) Adjustment to bring to Index Rate for Projection Period $0.07 0.0%

(3) Index Rate for the Projection Period $478.11

Section II: Market Adjusted Index Rate

(4) Risk Adjustment Impact $0.21 0.0%

(5) Reinsurance Impact -$18.02 -3.8%

(6) Exchange User Fees $28.35 5.9%

(7) Market Adjusted Index Rate $488.65 2.2%

Section III: Calculation of EHB Rate for 21 Year Old, 0% Cost Sharing, Silver Utilization Level

Section III A: Market Adjusted Index Rate Silver Utilization Level

(8) Experience Period Paid to Allowed Ratio 75%

(9) Paid to Allowed Ratio in Projection Period 71%

(10) Projected Federal Actuarial Value 70%

(11) Adjustment to Silver Level utilization 1.09

(12) Market Adjusted Index Rate Silver Utilization Level 531.23

Section III B: Retention Charge PMPM % Charge

(13) Administrative Expense Load $71.55 11.0%

(14) ACA Fees and Taxes $14.84 2.3%

(15) Premium Tax $13.00 2.0%

(16) Other Retention Charge $0.00 0.0%

(17) Contribution to Reserve $19.50 3.0%

(18) Investment Income Credit $0.00 0.0%

(19) Total Retention Charge $118.90 18.3%

(20) 1/1/2016 EHB Revenue Requirement for 0% cost sharing, silver utilization level (70%) $650.13

Section III C: Age Normalization/Calibration

(21) Age Normalization to 21 year old 1.6843*** Uncollected Premium Adjustment 1.0093

(22) 1/1/2016 EHB Rate for 21 year old, 0% cost sharing, silver utilization level (70%) $389.59

(23) 1/1/2015 Approved EHB Rate for 21 year old, 0% cost sharing, silver utilization level (70%) $330.09

(24) RATE INCREASE 18.0%


(26) 1/1/2016 Weighted Average Increase for All Plan Offerings 11.0%

Section IV: Annual Trend Assumption

Cost UtilizationProjected

PMPM

Inpatient Hospital 3.4% 0.0% $102.30Outpatient Hospital 2.8% 2.3% $119.39Primary Care 5.4% 0.0% $22.20Other Medical/Surgical 1.7% 0.0% $115.83Prescription Drug 0.0% 9.5% $83.42Capitation 0.0% 0.0% $0.00Other Not Categorized 0.0% 0.0% $8.26

$451.40Annual Trend 4.5%

Annualized Trend Factors

Rate Template Part IIIPlan Rates

Carrier Name: Blue Cross & Blue Shield of Rhode Island

Plan Type(s): PPO

Market Segment: Individual

Rate Effective Date: 1/1/2016

Market Adjusted Index Rate $488.65

HIOS Plan ID (Standard Component)

Plan Type (HMO, POS, PPO, Indemnity, Other) 1/1/15 Carrier Plan Code or Name

Discontinued, New, Modified, Existing (D, N,M, E) for 2016 1/1/16 Carrier Plan Code or Name Metallic Tier

Metallic Tier Actuarial Value

Standard AV, Approach (1), Approach (2)

Exchange On/Off or

OffPedi‐Dental Y

or NAbortion

Benefit Y or N

Totals 0.7043

Plan 1A 15287RI0270003 PPO VantageBlue Direct 1000/2000 WPD M VantageBlue Direct 1000/2000 WPD Gold 0.8020 Approach (1) On/Off Y YPlan 1B 15287RI0360001 PPO VantageBlue Direct 1000/2000 WOPD M VantageBlue Direct 1000/2000 WOPD Gold 0.8020 Approach (1) Off N YPlan 2A 15287RI0270004 PPO VantageBlue Direct 3000/6000 WPD M VantageBlue Direct 3000/6000 WPD Silver 0.7076 Approach (1) On/Off Y YPlan 2B 15287RI0360002 PPO VantageBlue Direct 3000/6000 WOPD M VantageBlue Direct 3000/6000 WOPD Silver 0.7076 Approach (1) Off N YPlan 3A 15287RI0720001 PPO N VantageBlue Direct Embedded Dental 1200/2400 Gold 0.7949 Approach (1) Off Y YPlan 4C 15287RI0020005 PPO BlueSolutions for HSA Direct 1500/3000 WPD M BlueSolutions for HSA Direct 1400/2800 WPD Gold 0.7803 Approach (1) On/Off Y NPlan 4D 15287RI0350001 PPO BlueSolutions for HSA Direct 1500/3000 WOPD M BlueSolutions for HSA Direct 1400/2800 WOPD Gold 0.7803 Approach (1) Off N NPlan 5A 15287RI0820001 PPO BlueSolutions for HSA Direct 2400/4800 WPD M BlueSolutions for HSA Direct 3700/7400 WPDA Bronze 0.6196 Approach (1) On/Off Y YPlan 5B 15287RI0830001 PPO BlueSolutions for HSA Direct 2400/4800 WOPD M BlueSolutions for HSA Direct 3700/7400 WOPDA Bronze 0.6196 Approach (1) Off N YPlan 6C 15287RI0020006 PPO BlueSolutions for HSA Direct 2600/5200 WPD M BlueSolutions for HSA Direct 3900/7800 WPD Silver 0.6807 Approach (1) On/Off Y NPlan 6D 15287RI0350002 PPO BlueSolutions for HSA Direct 2600/5200 WOPD M BlueSolutions for HSA Direct 3900/7800 WOPD Silver 0.6807 Approach (1) Off N NPlan 7C 15287RI0020008 PPO BlueSolutions for HSA Direct 5000/10000 WPD M BlueSolutions for HSA Direct 5350/10700 WPD Bronze 0.6189 Approach (1) On/Off Y NPlan 7D 15287RI0350003 PPO BlueSolutions for HSA Direct 5000/10000 WOPD M BlueSolutions for HSA Direct 5350/10700 WOPD Bronze 0.6189 Approach (1) Off N NPlan 8A 15287RI0700001 PPO N BasicBlue Direct WPD 2750/5500 Gold 0.7928 Approach (1) On/Off Y YPlan 8B 15287RI0710001 PPO N BasicBlue Direct WOPD 2750/5500 Gold 0.7928 Approach (1) Off N YPlan 9A 15287RI0700002 PPO N BasicBlue Direct WPD 4900/9800 Silver 0.6815 Approach (1) On/Off Y YPlan 9B 15287RI0710002 PPO N BasicBlue Direct WOPD 4900/9800 Silver 0.6815 Approach (1) Off N YPlan 10A 15287RI0700003 PPO N BasicBlue Direct WPD 6850/13700 Bronze 0.6194 Approach (1) On/Off Y YPlan 10B 15287RI0710003 PPO N BasicBlue Direct WOPD 6850/13700 Bronze 0.6194 Approach (1) Off N YPlan 11A 15287RI0800001 POS N BlueCHiP Direct 4500/9000 WPD Silver 0.6851 Approach (1) On/Off Y YPlan 11B 15287RI0810001 POS N BlueCHiP Direct 4500/9000 WOPD Silver 0.6851 Approach (1) Off N YPlan 10A 15287RI0700003 PPO VantageBlue Direct 5800/11600 WPD D BasicBlue Direct WPD 6850/13700 Bronze 0.6194 Approach (1) On/Off Y YPlan 10B 15287RI0710003 PPO VantageBlue Direct 5800/11600 WOPD D BasicBlue Direct WOPD 6850/13700 Bronze 0.6194 Approach (1) Off N YPlan 1A 15287RI0270003 PPO VantageBlue SelectRI Direct 500/1000 WPD D VantageBlue Direct 1000/2000 WPD Gold 0.8020 Approach (1) On/Off Y YPlan 1B 15287RI0360001 PPO VantageBlue SelectRI Direct 500/1000 WOPD D VantageBlue Direct 1000/2000 WOPD Gold 0.8020 Approach (1) Off N YPlan 2A 15287RI0270004 PPO VantageBlue Select RI Direct 3000/6000 WPD D VantageBlue Direct 3000/6000 WPD Silver 0.7076 Approach (1) On/Off Y YPlan 2B 15287RI0360002 PPO VantageBlue Select RI Direct 3000/6000 WOPD D VantageBlue Direct 3000/6000 WOPD Silver 0.7076 Approach (1) Off N YPlan 10A 15287RI0700003 PPO VantageBlue SelectRI Direct 5800/11600 WPD D BasicBlue Direct WPD 6850/13700 Bronze 0.6194 Approach (1) On/Off Y YPlan 10B 15287RI0710003 PPO VantageBlue SelectRI Direct 5800/11600 WOPD D BasicBlue Direct WOPD 6850/13700 Bronze 0.6194 Approach (1) Off N YPlan 10A 15287RI0700003 PPO BasicBlue Direct WPD D BasicBlue Direct WPD 6850/13700 Catastrophic 0.6194 Approach (1) On/Off Y YPlan 10B 15287RI0710003 PPO BasicBlue Direct WOPD D BasicBlue Direct WOPD 6850/13700 Catastrophic 0.6194 Approach (1) Off N Y

Provider Network

Utilization Management

Benefits in addition to

EHBAV and Cost Sharing

Distribution and Admin Costs less

Exchange FeesCat Plan

Adjustment

Proposed 1/1/16 Plan Adjustment

Other Adjustments (Calibration, 3 child cap etc.)

0.9926 1.0107 1.0017 0.7043 1.2238 1.0000 0.8746 0.5949

1.00 1.1687 1.00008 0.8077 1.22 1.00 1.16 0.591.00 1.1687 1.00008 0.8058 1.22 1.00 1.15 0.591.00 1.0953 1.00008 0.7209 1.22 1.00 0.97 0.591.00 1.0953 1.00008 0.7188 1.22 1.00 0.96 0.591.00 1.1598 1.06213 0.7962 1.22 1.00 1.20 0.591.00 1.0779 1.00000 0.8037 1.22 1.00 1.06 0.591.00 1.0779 1.00000 0.8016 1.22 1.00 1.06 0.591.00 0.9152 1.00008 0.6180 1.22 1.00 0.69 0.591.00 0.9152 1.00008 0.6155 1.22 1.00 0.69 0.591.00 0.9526 1.00000 0.6729 1.22 1.00 0.78 0.591.00 0.9526 1.00000 0.6706 1.22 1.00 0.78 0.591.00 0.9053 1.00000 0.6073 1.22 1.00 0.67 0.591.00 0.9053 1.00000 0.6048 1.22 1.00 0.67 0.591.00 1.0422 1.00008 0.7937 1.22 1.00 1.01 0.591.00 1.0422 1.00008 0.7916 1.22 1.00 1.01 0.591.00 0.9568 1.00008 0.6856 1.22 1.00 0.80 0.591.00 0.9568 1.00008 0.6832 1.22 1.00 0.80 0.591.00 0.8876 1.00008 0.6164 1.22 1.00 0.67 0.591.00 0.8876 1.00008 0.6139 1.22 1.00 0.67 0.590.94 0.9664 1.00008 0.6778 1.22 1.00 0.76 0.590.94 0.9664 1.00008 0.6755 1.22 1.00 0.75 0.591.00 0.8876 1.00008 0.6164 1.22 1.00 0.67 0.591.00 0.8876 1.00008 0.6139 1.22 1.00 0.67 0.591.00 1.1687 1.00008 0.8077 1.22 1.00 1.16 0.591.00 1.1687 1.00008 0.8058 1.22 1.00 1.15 0.591.00 1.0953 1.00008 0.7209 1.22 1.00 0.97 0.591.00 1.0953 1.00008 0.7188 1.22 1.00 0.96 0.591.00 0.8876 1.00008 0.6164 1.22 1.00 0.67 0.591.00 0.8876 1.00008 0.6139 1.22 1.00 0.67 0.591.00 0.8876 1.00008 0.6164 1.22 1.00 0.67 0.591.00 0.8876 1.00008 0.6139 1.22 1.00 0.67 0.59

45 CFR Part 156.8 (d) (2) Allowable Factors

Total Number of Members/Enrolled Policyholders +

Covered Dependents

Total Number of Subscribers/Enrolled

Policyholders

1/1/16 Number of Members/Enrolled Policyholders +

Covered Dependents

1/1/16 Number of Subscribers/Enrolled

Policyholders

1/1/15 Normalized Plan Adjusted Rate

PMPM 1/1/16 Normalized Plan Adjusted Rate

Proposed Rate Change

Compared to Prior 12 months

% of Total Members/Enrolled Policyholders +

Covered Dependents

% of 1/1/16 Members/Enro

lled Policyholders +

Covered Dependents

38,304 25,674 38,304 25,674 $233.29 $258.89 11.0% 100.0% 100.0%

3,077 1,857 3,077 1,857 294.09 $335.82 14.2% 8.0% 8.0%1,847 1,151 1,847 1,151 292.67 $335.02 14.5% 4.8% 4.8%3,881 2,492 3,881 2,492 247.74 $280.90 13.4% 10.1% 10.1%1,194 788 1,194 788 246.32 $280.10 13.7% 3.1% 3.1%1,000 670 1,000 670 $348.92 2.6% 2.6%2,403 1,443 2,403 1,443 273.67 $308.18 12.6% 6.3% 6.3%

300 233 300 233 272.25 $307.38 12.9% 0.8% 0.8%254 246 254 246 190.76 $201.21 5.5% 0.7% 0.7%153 146 153 146 189.34 $200.41 5.8% 0.4% 0.4%

4,846 3,672 4,846 3,672 223.43 $228.03 2.1% 12.7% 12.7%123 87 123 87 222.01 $227.23 2.4% 0.3% 0.3%

5,944 3,972 5,944 3,972 174.86 $195.57 11.8% 15.5% 15.5%1,054 720 1,054 720 173.44 $194.78 12.3% 2.8% 2.8%2,403 1,443 2,403 1,443 $294.29 6.3% 6.3%

300 233 300 233 $293.49 0.8% 0.8%2,403 1,443 2,403 1,443 $233.36 6.3% 6.3%

801 481 801 481 $232.56 2.1% 2.1%1,202 722 1,202 722 $194.64 3.1% 3.1%

150 116 150 116 $193.84 0.4% 0.4%4,846 3,672 4,846 3,672 $219.76 12.7% 12.7%

123 87 123 87 $219.02 0.3% 0.3%- - 177.51 $194.64 9.7% 0.0% 0.0%- - 176.09 $193.84 10.1% 0.0% 0.0%- - 299.26 $335.82 12.2% 0.0% 0.0%- - 297.84 $335.02 12.5% 0.0% 0.0%- - 251.37 $280.90 11.7% 0.0% 0.0%- - 249.95 $280.10 12.1% 0.0% 0.0%- - 223.43 $194.64 -12.9% 0.0% 0.0%- - 222.01 $193.84 -12.7% 0.0% 0.0%- - 155.97 $194.64 24.8% 0.0% 0.0%- - 154.55 $193.84 25.4% 0.0% 0.0%

Rate Template Part IVAdministrative Charges

Section I. EHB 0% cost sharing, silver utilization level (70%

PMPM Percentage PMPM Percentage(1) Retention Charge $118.90 18.3% $99.51 17.9%

(2) ACA Fees and Taxes $14.84 2.3% $14.07 2.5%

(3) Premium Tax $13.00 2.0% $11.10 2.0%

(4) Other Retention Charge $0.00 0.0% $2.78 0.5%

(5) Contribution to Reserve $19.50 3.0% $12.99 2.3%

(6) Investment Income Credit $0.00 0.0% $0.00 0.0%

(7) Administrative Expense Load $71.55 11% $58.57 11%

7a. Payroll and benefits $28.69 4.4% $26.85 4.8%7b. Outsourced Services (EDP, claims etc.) $13.93 2.1% $9.27 1.7%7c. Auditing and consulting $7.96 1.2% $9.53 1.7%7d. Commissions $5.27 0.8% $0.00 0.0%7e. Marketing and Advertising $1.72 0.3% $1.53 0.3%7f. Legal Expenses $1.17 0.2% $1.74 0.3%7g. Taxes, Licenses and Fees not included in (2) and (3) $0.00 0.0% $0.00 0.0%7h. Reimbursements by Uninsured Plans $0.00 0.0% $0.00 0.0%7i. Other Admin Expenses $12.82 2.0% $9.66 1.7%

$71.55 11.0% $58.57 10.6%

Section II. Market SegmentPMPM Percentage PMPM Percentage PMPM Percentage

(1) Retention Charge $77.97 18.3% $103.07 20.9% $90.96 18.5%

(2) ACA Fees and Taxes $9.83 2.3% $11.21 2.3% $13.44 2.7%

(3) Premium Tax $8.62 2.0% $9.84 2.0% $9.83 2.0%

(4) Other Retention Charge $0.00 0.0% $0.00 0.0% $0.00 0.0%

(5) Contribution to Reserve $12.93 3.0% $19.69 4.0% $19.66 4.0%

(6) Investment Income Credit $0.00 0.0% -$0.64 -0.1% -$0.84 -0.2%

(7) Administrative Expense Load $46.59 11.0% $62.97 12.8% $48.87 9.9%

7a. Payroll and benefits $18.68 4.4% $28.23 5.7% $26.76 5.4%7b. Outsourced Services (EDP, claims etc.) $9.07 2.1% $13.54 2.8% $12.78 2.6%7c. Auditing and consulting $5.18 1.2% $7.56 1.5% $7.17 1.5%7d. Commissions $3.43 0.8% $9.76 2.0% $0.00 0.0%7e. Marketing and Advertising $1.12 0.3% $0.95 0.2% $0.90 0.2%7f. Legal Expenses $0.76 0.2% $0.96 0.2% $0.91 0.2%7g. Taxes, Licenses and Fees not included in (2) and (3) $0.00 0.0% $0.00 0.0% $0.00 0.0%7h. Reimbursements by Uninsured Plans $0.00 0.0% -$11.43 -2.3% -$14.97 -3.0%7i. Other Admin Expenses $8.35 2.0% $13.40 2.7% $15.32 3.1%

Individual Market 1/1/16 Individual Market 1/1/15

Individual Market 1/1/16 Small Group Market 1/1/16 Large Group Market 1/1/16

12

3

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22

2324252627282930313233343536373839404142434445464748

4950

A B C D E F G H I J K L M N O P Q R S T U V W X YUnified Rate Review v2.0.4

Company Legal Name: Blue Cross & Blue Shield of RI State: RIHIOS Issuer ID: 15287 Market: IndividualEffective Date of Rate Change(s): 1/1/2016

Market Level Calculations (Same for all Plans)

Section I: Experience period dataExperience Period: 1/1/2014 to 12/31/2014

Experience Period Aggregate Amount PMPM % of Prem

Premiums (net of MLR Rebate) in Experience Period: $147,165,212 $367.69 100.00%Incurred Claims in Experience Period $111,537,362 278.68 75.79%Allowed Claims: $172,884,477 431.95 117.48%Index Rate of Experience Period $432.00Experience Period Member Months 400,238

Section II: Allowed Claims, PMPM basisExperience Period Projection Period: 1/1/2016 to 12/31/2016 Mid‐point to Mid‐point, Experience to Projection: 24 months

on Actual Experience AllowedAdj't. from Experience to


Benefit CategoryUtilization Description



Pop'l risk Morbidity Other Cost Util





Inpatient Hospital Admits 327.61 $3,624.95 $98.96 1.017 1.000 1.034 1.000 333.21 $3,873.62 $107.56 0.00 $0.00 $0.00Outpatient Hospital Services 2,116.51 643.92 113.57 1.017 1.000 1.028 1.023 2,252.89 679.96 127.66 0.00 0.00 0.00Professional Services 9,875.44 155.18 127.70 1.017 1.000 1.023 1.000 10,044.44 162.28 135.84 0.00 0.00 0.00Other Medical Services 1,200.67 155.18 15.53 1.017 0.940 1.023 1.000 1,221.22 152.48 15.52 0.00 0.00 0.00Capitation 0.00 0.00 0.00 1.000 1.000 1.000 1.000 0.00 0.00 0.00 0.00 0.00 0.00Prescription Drug Prescriptions 13,710.08 66.68 76.18 1.017 0.985 1.000 1.095 16,720.05 65.65 91.47 0.00 0.00 0.00Total $431.95 $478.04 $0.00

After Credibility Projected Period TotalsSection III: Projected Experience: Projected Allowed Experience Claims PMPM (w/applied credibility if applicable) 100.00% 0.00% $478.04 $219,730,130

Paid to Allowed Average Factor in Projection Period 0.708Projected Incurred Claims, before ACA rein & Risk Adj't, PMPM $338.46 $155,570,634Projected Risk Adjustments PMPM ‐0.15 (67,032) Projected Incurred Claims, before reinsurance recoveries, net of rein prem, PMPM $338.60 $155,637,666Projected ACA reinsurance recoveries, net of rein prem, PMPM 12.75 5,862,613

Projected Incurred Claims $325.85 $149,775,054

Administrative Expense Load 10.90% 46.59 21,415,097Profit & Risk Load 3.90% 16.65 7,655,364Taxes & Fees 8.94% 38.20 17,556,385Single Risk Pool Gross Premium Avg. Rate, PMPM $427.29 $196,401,900Index Rate for Projection Period $478.00

% increase over Experience Period 16.21%% Increase, annualized: 7.80%

Projected Member Months 459,648

Information Not Releasable to the Public Unless Authorized by Law: This information has not been publically disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.


1 of 2

Product‐Plan Data Collection

Company Legal Name: Blue Cross & Blue Shield of RI State: RIHIOS Issuer ID: 15287 Market: IndividualEffective Date of Rate Change(s):

Product/Plan Level Calculations

Section I: General Product and Plan InformationProduct VantageBlue Direct Direct (without pedVantageBlue Direct Direct (without pedgeBlue Direct with DSolutions for HSA DHSA Direct (withouSolutions for HSA DHSA Direct (withouSolutions for HSA DHSA Direct (withouSolutions for HSA DHSA Direct (withouBasicBlue Direct WPasicBlue Direct WOPBasicBlue Direct WPasicBlue Direct WOPBasicBlue Direct WPasicBlue Direct WOP BlueCHiP Direct BlueCHiP DirectProduct ID: 15287RI027 15287RI036 15287RI027 15287RI036 15287RI072 15287RI002 15287RI035 15287RI082 15287RI083 15287RI002 15287RI035 15287RI002 15287RI035 15287RI070 15287RI071 15287RI070 15287RI071 15287RI070 15287RI071 15287RI080 15287RI081Metal: Gold Gold Silver Silver Gold Gold Gold Bronze Bronze Silver Silver Bronze Bronze Gold Gold Silver Silver Bronze Bronze Silver SilverAV Metal Value 0.802 0.802 0.708 0.708 0.795 0.780 0.780 0.620 0.620 0.681 0.681 0.619 0.619 0.793 0.793 0.682 0.682 0.619 0.619 0.685 0.685AV Pricing Value 0.808 0.806 0.721 0.719 0.796 0.804 0.802 0.618 0.616 0.673 0.671 0.607 0.605 0.794 0.792 0.686 0.683 0.616 0.614 0.678 0.676Plan Type: PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO PPO POS POS

Plan NameVantageBlue

Direct 1000/2000 WPD


WOPD


WPD


WOPD

VantageBlue Direct Embedded Dental 1200/2400

BlueSolutions for HSA Direct

1400/2800 WPD


1400/2800 WOPD


3700/7400 WPDA

HSA Direct 3700/7400 WOPDA


3900/7800 WPD


3900/7800 WOPD


5350/10700 WPD

HSA Direct 5350/10700

WOPDBasicBlue Direct WPD 2750/5500

BasicBlue Direct WOPD 2750/5500

BasicBlue Direct WPD 4900/9800

BasicBlue Direct WOPD 4900/9800

BasicBlue Direct WPD 6850/13700

BasicBlue Direct WOPD

6850/13700BlueCHiP Direct 4500/9000 WPD

BlueCHiP Direct 4500/9000 WOPD

Plan ID (Standard Component ID): 15287RI0270003 15287RI0360001 15287RI0270004 15287RI0360002 15287RI0720001 15287RI0020005 15287RI0350001 15287RI0820001 15287RI0830001 15287RI0020006 15287RI0350002 15287RI0020008 15287RI0350003 15287RI0700001 15287RI0710001 15287RI0700002 15287RI0710002 15287RI0700003 15287RI0710003 15287RI0800001 15287RI0810001Exchange Plan? Yes No Yes No No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes NoHistorical Rate Increase ‐ Calendar Year ‐ 2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Historical Rate Increase ‐ Calendar Year ‐ 1 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00% 12.00%Historical Rate Increase ‐ Calendar Year 0 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70% 4.70%Effective Date of Proposed Rates 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016 1/1/2016Rate Change % (over prior filing) 23.85% 24.32% 22.50% 23.05% 0.00% 21.20% 21.69% 9.21% 9.83% 3.46% 3.95% 19.91% 20.69% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Cum'tive Rate Change % (over 12 mos prior) 23.85% 24.32% 22.50% 23.05% ‐999.00% 21.20% 21.69% 9.21% 9.83% 3.46% 3.95% 19.91% 20.69% ‐999.00% ‐999.00% ‐999.00% ‐999.00% ‐999.00% ‐999.00% ‐999.00% ‐999.00%Proj'd Per Rate Change % (over Exper. Period) 25.02% 37.48% 17.70% 28.86% #DIV/0! 21.17% 16.45% 11.99% 17.63% 5.40% 6.03% 17.10% 14.92% #DIV/0! #DIV/0! #DIV/0! #DIV/0! 16.30% 21.11% #DIV/0! #DIV/0!Product Threshold Rate Increase % 23.85% 24.32% 22.50% 23.05% 0.00% 21.19% 21.68% 9.20% 9.82% 3.46% 3.95% 19.91% 20.68% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Section II: Components of Premium Increase (PMPM Dollar Amount above Current Average Rate PMPM)

Plan ID (Standard Component ID): Total 15287RI0270003 15287RI0360001 15287RI0270004 15287RI0360002 15287RI0720001 15287RI0020005 15287RI0350001 15287RI0820001 15287RI0830001 15287RI0020006 15287RI0350002 15287RI0020008 15287RI0350003 15287RI0700001 15287RI0710001 15287RI0700002 15287RI0710002 15287RI0700003 15287RI0710003 15287RI0800001 15287RI0810001Inpatient $0.76 $1.48 $1.50 $1.17 $1.19 $0.00 $1.22 $1.24 $0.37 $0.39 $0.16 $0.18 $0.73 $0.75 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Outpatient $1.27 $2.48 $2.52 $1.97 $2.01 $0.00 $2.05 $2.09 $0.62 $0.66 $0.27 $0.31 $1.23 $1.27 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Professional $0.75 $1.47 $1.49 $1.17 $1.19 $0.00 $1.21 $1.23 $0.37 $0.39 $0.16 $0.18 $0.73 $0.75 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Prescription Drug $1.45 $2.83 $2.87 $2.25 $2.29 $0.00 $2.34 $2.38 $0.71 $0.75 $0.31 $0.35 $1.41 $1.45 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Other ‐$1.66 ‐$3.25 ‐$3.30 ‐$2.58 ‐$2.63 $0.00 ‐$2.69 ‐$2.73 ‐$0.81 ‐$0.86 ‐$0.36 ‐$0.41 ‐$1.61 ‐$1.66 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Capitation $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Administration $4.39 $8.58 $8.71 $6.82 $6.95 $0.00 $7.10 $7.22 $2.15 $2.28 $0.95 $1.07 $4.26 $4.39 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Taxes & Fees $27.47 $53.68 $54.47 $42.65 $43.45 $0.00 $44.38 $45.18 $13.44 $14.24 $5.92 $6.72 $26.64 $27.45 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Risk & Profit Charge $1.48 $2.88 $2.93 $2.29 $2.33 $0.00 $2.38 $2.43 $0.72 $0.76 $0.32 $0.36 $1.43 $1.47 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Total Rate Increase $35.90 $70.15 $71.19 $55.74 $56.79 $0.00 $58.01 $59.05 $17.56 $18.61 $7.73 $8.78 $34.82 $35.88 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Member Cost Share Increase $11.88 $9.24 $10.09 $12.61 $13.61 $0.00 $12.31 $13.15 $0.00 $0.00 $17.73 $18.75 $12.81 $14.10 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Average Current Rate PMPM $152.73 $294.09 $292.67 $247.74 $246.32 $0.00 $273.67 $272.25 $190.76 $189.34 $223.43 $222.01 $174.86 $173.44 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Projected Member Months 459,648 36,924 22,164 46,572 14,328 12,000 28,836 3,600 3,048 1,836 58,152 1,476 71,328 12,648 28,836 3,600 28,836 9,612 14,424 1,800 58,152 1,476

ction III: Experience Period Information

Plan ID (Standard Component ID): Total 15287RI0270003 15287RI0360001 15287RI0270004 15287RI0360002 15287RI0720001 15287RI0020005 15287RI0350001 15287RI0820001 15287RI0830001 15287RI0020006 15287RI0350002 15287RI0020008 15287RI0350003 15287RI0700001 15287RI0710001 15287RI0700002 15287RI0710002 15287RI0700003 15287RI0710003 15287RI0800001 15287RI0810001Plan Adjusted Index Rate $367.69 $451.54 $409.64 $401.19 $365.41 $0.00 $427.57 $443.73 $302.03 $286.40 $363.69 $360.25 $280.76 $284.93 $0.00 $0.00 $0.00 $0.00 $281.35 $269.06 $0.00 $0.00Member Months 400,238 57,637 22,740 70,453 12,442 0 18,887 1,666 5,514 2,692 111,060 1,092 45,429 7,846 0 0 0 0 38,763 4,017 0 0Total Premium (TP) $147,165,212 $26,025,171 $9,315,316 $28,264,803 $4,546,467 $0 $8,075,486 $739,258 $1,665,412 $770,982 $40,391,807 $393,396 $12,754,797 $2,235,562 $0 $0 $0 $0 $10,905,948 $1,080,806 $0 $0

EHB Percent of TP, [see instructions] 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% state mandated benefits portion of TP that are other than EHB 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Other benefits portion of TP 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% Total Allowed Claims (TAC) $172,884,477 $34,408,675 $12,644,686 $29,310,854 $4,557,261 $0 $14,235,661 $2,136,859 $1,550,001 $944,879 $48,001,883 $457,717 $12,679,717 $2,176,728 $0 $0 $0 $0 $9,057,245 $722,311 $0 $0

EHB Percent of TAC, [see instructions] 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% state mandated benefits portion of TAC that are other than EHB 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Other benefits portion of TAC 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%

Allowed Claims which are not the issuer's obligation: $59,390,432 $9,268,999 $3,200,678 $10,445,567 $1,440,260 $0 $4,029,111 $485,845 $723,755 $463,877 $18,396,938 $211,415 $6,223,980 $932,448 $0 $0 $0 $0 $3,282,997 $284,561 $0 $0Portion of above payable by HHS's funds on behalf of insured person, in dollars $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Portion of above payable by HHS on behalf of insured person, as % 0.00% 0.00% 0.00% 0.00% 0.00% #DIV/0! 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% #DIV/0! #DIV/0! #DIV/0! #DIV/0! 0.00% 0.00% #DIV/0! #DIV/0!

Total Incurred claims, payable with issuer funds $113,494,045 $25,139,676 $9,444,007 $18,865,287 $3,117,001 $0 $10,206,550 $1,651,014 $826,246 $481,002 $29,604,945 $246,302 $6,455,737 $1,244,280 $0 $0 $0 $0 $5,774,248 $437,750 $0 $0

Net Amt of Rein $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Net Amt of Risk Adj $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Incurred Claims PMPM $283.57 $436.17 $415.30 $267.77 $250.52 #DIV/0! $540.40 $991.00 $149.85 $178.68 $266.57 $225.55 $142.11 $158.59 #DIV/0! #DIV/0! #DIV/0! #DIV/0! $148.96 $108.97 #DIV/0! #DIV/0!Allowed Claims PMPM $431.95 $596.99 $556.05 $416.03 $366.28 #DIV/0! $753.73 $1,282.63 $281.10 $351.00 $432.22 $419.15 $279.11 $277.43 #DIV/0! #DIV/0! #DIV/0! #DIV/0! $233.66 $179.81 #DIV/0! #DIV/0!EHB portion of Allowed Claims, PMPM $431.91 $596.93 $556.00 $415.99 $366.24 #DIV/0! $753.65 $1,282.50 $281.07 $350.96 $432.17 $419.11 $279.08 $277.40 #DIV/0! #DIV/0! #DIV/0! #DIV/0! $233.63 $179.80 #DIV/0! #DIV/0!

ction IV: Projected (12 months following effective date)

Plan ID (Standard Component ID): Total 15287RI0270003 15287RI0360001 15287RI0270004 15287RI0360002 15287RI0720001 15287RI0020005 15287RI0350001 15287RI0820001 15287RI0830001 15287RI0020006 15287RI0350002 15287RI0020008 15287RI0350003 15287RI0700001 15287RI0710001 15287RI0700002 15287RI0710002 15287RI0700003 15287RI0710003 15287RI0800001 15287RI0810001Plan Adjusted Index Rate $427.38 $564.53 $563.19 $472.21 $470.86 $586.55 $518.07 $516.72 $338.25 $336.90 $383.33 $381.99 $328.76 $327.44 $494.72 $493.37 $392.29 $390.95 $327.20 $325.86 $369.43 $368.18Member Months 459,648 36,924 22,164 46,572 14,328 12,000 28,836 3,600 3,048 1,836 58,152 1,476 71,328 12,648 28,836 3,600 28,836 9,612 14,424 1,800 58,152 1,476 Total Premium (TP) $196,443,838 $20,844,777 $12,482,479 $21,991,689 $6,746,533 $7,038,645 $14,938,996 $1,860,202 $1,030,971 $618,549 $22,291,464 $563,812 $23,450,075 $4,141,409 $14,265,680 $1,776,142 $11,312,104 $3,757,775 $4,719,541 $586,540 $21,483,016 $543,441

EHB Percent of TP, [see instructions] 99.81% 99.99% 99.99% 99.99% 99.99% 94.90% 100.00% 100.00% 99.99% 99.99% 100.00% 100.00% 100.00% 100.00% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% state mandated benefits portion of TP that are other than EHB 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Other benefits portion of TP 0.19% 0.01% 0.01% 0.01% 0.01% 5.10% 0.00% 0.00% 0.01% 0.01% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% Total Allowed Claims (TAC) $223,331,255 $23,537,950 $14,095,343 $24,833,516 $7,618,411 $7,948,174 $16,869,328 $2,100,585 $1,164,183 $698,481 $25,172,040 $636,677 $26,480,740 $4,676,467 $16,109,052 $2,005,669 $12,773,669 $4,243,341 $5,329,307 $662,331 $25,725,240 $650,752

EHB Percent of TAC, [see instructions] 99.83% 99.99% 99.99% 99.99% 99.99% 95.40% 100.00% 100.00% 99.99% 99.99% 100.00% 100.00% 100.00% 100.00% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% 99.99% state mandated benefits portion of TAC that are other than EHB 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Other benefits portion of TAC 0.17% 0.01% 0.01% 0.01% 0.01% 4.60% 0.00% 0.00% 0.01% 0.01% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%

Allowed Claims which are not the issuer's obligation $74,558,652 $7,751,597 $4,642,001 $8,178,574 $2,509,066 $2,617,605 $5,555,594 $691,800 $383,399 $230,036 $8,290,069 $209,686 $8,721,320 $1,540,058 $5,305,240 $660,545 $4,206,686 $1,397,470 $1,755,062 $218,127 $9,455,530 $239,188Portion of above payable by HHS's funds on behalf of insured person, in dollars $0Portion of above payable by HHS on behalf of insured person, as % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Total Incurred claims, payable with issuer funds $148,772,602 $15,786,353 $9,453,342 $16,654,942 $5,109,344 $5,330,569 $11,313,734 $1,408,785 $780,784 $468,445 $16,881,971 $426,991 $17,759,420 $3,136,409 $10,803,812 $1,345,124 $8,566,984 $2,845,871 $3,574,245 $444,204 $16,269,710 $411,563

Net Amt of Rein $0 Net Amt of Risk Adj $0

1/1/2016

BLUE CROSS & BLUE SHIELD OF RHODE ISLAND. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Supplement for the year 2013 of the

SUPPLEMENTAL HEALTH CARE EXHIBIT - PART 1(To Be Filed by April 1 - Not for Rebate Purposes)

REPORT FOR: 1. Corporation BLUE CROSS & BLUE SHIELD OF RHODE ISLAND 2. 500 EXCHANGE STREET PROVIDENCE, RHODE ISLAND 02903(LOCATION)

0000. . . . . . . .NAIC Group Code BUSINESS IN THE STATE OF RHODE ISLAND DURING THE YEAR 2013 53473. . . . . . . .NAIC Company Code Business Subject to MLR 10 11 12 13 14 15

Comprehensive Health Coverage Mini-Med Plans Expatriate Plans 9 Government 1 2 3 4 5 6 7 8 Student Business Other

Small Group Large Group Small Group Large Group Small Large Health (excluded by Health Aggregate Subtotal Uninsured TotalIndividual Employer Employer Individual Employer Employer Group Group Plans statute) Business (2% Rule) (Cols 1 thru 12) Plans 13 + 14

1. Premium:1.1 Health premiums earned (From Part 2, Line 1.11) 66,092,005 324,874,725 662,647,626 392,668,018 91,309,900 1,537,592,274 X X X 1,537,592,2741.2 Federal high risk pools 3,358,791 3,358,791 X X X 3,358,7911.3 State high risk pools X X X1.4 Premiums earned including state and federal high risk programs (Lines 1.1 + 1.2 + 1.3) 69,450,796 324,874,725 662,647,626 392,668,018 91,309,900 1,540,951,065 X X X 1,540,951,0651.5 Federal taxes and federal assessments 263,006 745,142 1,056,858 1,133,910 543,148 3,742,064 345,681 4,087,7451.6 0. . . . . . . .State insurance, premium and other taxes (Similar local taxes of $ ) 1,353,559 5,912,017 11,887,657 1,655,879 20,809,112 20,809,112

1.6a Community Benefit Expenditures (informational only)1.7 Regulatory authority licenses and fees 48,295 33,608 50,401 27,113 61,898 221,315 52,962 274,2771.8 Adjusted Premiums Earned (Lines 1.4 - 1.5 - 1.6 - 1.7) 67,785,936 318,183,958 649,652,710 391,506,995 89,048,975 1,516,178,574 X X X 1,515,779,9311.9 Net Assumed less Ceded reinsurance premiums earned (134,249) (3,100,769) (3,235,018) X X X (3,235,018)1.10 Other Adjustments due to MLR calculations - Premiums X X X1.11 Risk Revenue X X X1.12 Net adjusted premiums earned after reinsurance (Lines 1.8 + 1.9 + 1.10 + 1.11) 67,785,936 318,183,958 649,518,461 391,506,995 85,948,206 1,512,943,556 X X X 1,512,544,913

2. Claims:2.1 Incurred claims excluding prescription drugs 51,178,517 228,665,080 486,452,393 307,349,602 70,433,471 1,144,079,063 X X X 1,144,079,0632.2 Prescription drugs 14,106,912 43,650,333 82,045,756 47,387,988 147,970 187,338,959 X X X 187,338,9592.3 Pharmaceutical rebates 718,257 2,770,553 4,303,479 6,658,705 14,450,994 X X X 14,450,9942.4 State stop loss, market stabilization and claim/census based assessments (informational only) X X X

3. Incurred medical incentive pools and bonuses 305,959 1,309,243 2,881,888 1,054,874 5,551,964 X X X 5,551,9644. Deductible Fraud and Abuse Detection/Recovery Expenses (for MLR use only) 25,081 102,084 216,514 39,364 102,279 485,322 485,3225. 5.0 Total Incurred Claims (Lines 2.1 + 2.2 - 2.3 + 3) (From Part 2, Line 2.15) 64,873,131 270,854,103 567,076,558 349,133,759 70,581,441 1,322,518,992 X X X 1,322,518,992

5.1 Net Assumed less Ceded reinsurance claims incurred X X X5.2 Other Adjustments due to MLR calculations - Claims X X X5.3 Rebates Paid X X X X X X X X X X X X5.4 Estimated rebates unpaid prior year X X X X X X X X X X X X5.5 Estimated rebates unpaid current year X X X X X X X X X X X X5.6 Fee for service and co-pay revenue X X X5.7 Net incurred claims after reinsurance (Lines 5.0 + 5.1 + 5.2 + 5.3 - 5.4 + 5.5 - 5.6) 64,873,131 270,854,103 567,076,558 349,133,759 70,581,441 1,322,518,992 X X X 1,322,518,992

53473201321640100

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SUPPLEMENTAL HEALTH CARE EXHIBIT - PART 1 (Continued)(To Be Filed by April 1 - Not for Rebate Purposes)



Comprehensive Health Coverage Mini-Med Plans Expatriate Plans 9 Government 1 2 3 4 5 6 7 8 Student Business Other


6. Improving Health Care Quality Expenses Incurred:6.1 Improve Health Outcomes 393,903 1,221,809 2,327,947 1,684,676 164,858 5,793,193 881,915 6,675,1086.2 Activities to prevent hospital readmissions 46,217 84,131 158,319 217,195 43,209 549,071 252,760 801,8316.3 Improve patient safety and reduce medical errors 48,858 106,471 169,457 786,856 24,223 1,135,865 218,966 1,354,8316.4 Wellness and health promotion activities 63,628 92,659 139,432 151,536 274,691 721,946 207,654 929,6006.5 Health Information Technology expenses related to health improvement 77,800 154,711 282,622 346,165 124,156 985,454 304,888 1,290,3426.6 Total of Defined Expenses Incurred for Improving Health Care Quality (Lines 6.1 + 6.2 +

6.3 + 6.4 + 6.5) 630,406 1,659,781 3,077,777 3,186,428 631,137 9,185,529 1,866,183 11,051,7127. Preliminary Medical Loss Ratio: MLR (Lines 4 + 5.0 + 6.6) / Line 1.8 0.967 0.857 0.878 X X X X X X X X X X X X X X X X X X8. Claims Adjustment Expenses:

8.1 Cost containment expenses not included in quality of care expenses in Line 6.6 916,950 3,568,208 6,137,068 8,594,537 956,912 20,173,675 9,356,470 29,530,1458.2 All other claims adjustment expenses 2,116,366 7,927,228 15,859,283 10,173,532 1,241,535 37,317,944 23,552,877 60,870,8218.3 Total claims adjustment expenses (Lines 8.1 + 8.2) 3,033,316 11,495,436 21,996,351 18,768,069 2,198,447 57,491,619 32,909,347 90,400,966

9. Claims Adjustment Expense Ratio (Line 8.3 / Line 1.8) 0.045 0.036 0.034 0.048 0.025 X X X X X X X X X10. General and Administrative (G&A) Expenses:

10.1 Direct sales salaries and benefits 1,595,180 3,702,772 4,597,516 5,756,966 2,320,039 17,972,473 6,252,373 24,224,84610.2 Agents and brokers fees and commissions 7,216,191 10,658,413 1,407,499 19,282,103 175,797 19,457,90010.3 Other taxes (excluding taxes on Lines 1.5 through 1.7 and Line 14 below) 25,600 99,212 163,673 104,270 55,344 448,099 158,223 606,32210.4 Other general and administrative expenses 4,508,473 22,835,307 38,133,734 20,709,334 4,475,986 90,662,834 1,241,939 91,904,773

10.4a Community Benefit Expenditures (informational only)10.5 Total general and administrative (Lines 10.1 + 10.2 + 10.3 + 10.4) 6,129,253 33,853,482 53,553,336 26,570,570 8,258,868 128,365,509 7,828,332 136,193,841

11. Underwriting Gain/(Loss) (Lines 1.12 - 5.7 - 6.6 - 8.3 - 10.5) (6,880,170) 321,156 3,814,439 (6,151,831) 4,278,313 (4,618,093) X X X (47,620,598)12. Income from fees of uninsured plans X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 42,024,151 42,024,15113. Net investment and other gain/(loss) X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 27,795,165 X X X 27,795,16514. Federal income taxes (excluding taxes on Line 1.5 above) X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 450,024 X X X 450,02415. Net gain or (loss) (Lines 11 + 12 + 13 - 14) X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 22,727,048 X X X 21,748,69416. ICD-10 Implementation Expenses (informational only; already included

in general expenses and Line 6.5) 33,899 126,850 237,528 182,233 170,249 750,759 329,487 1,080,24616a ICD-10 Implementation Expenses (informational only; already included in Line 6.5)OTHER INDICATORS:

1. Number of Certificates / Policies 11,216 30,259 69,112 32,063 100,679 243,329 60,820 304,1492. Number of Covered Lives 17,254 59,328 139,289 32,063 153,614 401,548 149,868 551,4163. Number of Groups X X X 7,931 491 X X X 406 535 9,363 20 9,3834. Member Months 202,476 721,603 1,679,907 382,598 1,158,284 4,144,868 2,142,053 6,286,921

Is run-off business reported in Columns 1 through 9? Yes [ ] No [ X ] 0. . . . . . . . 0. . . . . . . .If yes, show the amount of premiums and claims included: Premiums $ , Claims $

53473201321640100

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0000. . . . . . . . .NAIC Group Code BUSINESS IN THE STATE OF RHODE ISLAND DURING THE YEAR 2013 53473. . . . . . . . .NAIC Company Code Business Subject to MLR 10 11 12 13

Comprehensive Health Coverage Mini-Med Plans Expatriate Plans 9 1 2 3 4 5 6 7 8 Government

Student Business OtherSmall Group Large Group Small Group Large Group Small Large Health (excluded by Health Aggregate Total

Individual Employer Employer Individual Employer Employer Group Group Plans statute) Business (2% Rule) (a)1. Health Premiums Earned:

1.1 Direct premiums written 69,450,796 324,874,725 660,395,342 392,668,018 91,309,900 1,538,698,7811.2 Unearned premium prior year 25,503,732 25,503,7321.3 Unearned premium current year 23,251,448 23,251,4481.4 Change in unearned premium (Lines 1.2 - 1.3) 2,252,284 2,252,2841.5 Paid rate credits1.6 Reserve for rate credits current year1.7 Reserve for rate credits prior year1.8 Change in reserve for rate credits (Lines 1.6 - 1.7)1.9 Premium balances written off1.1 Group conversion charge1.1 Total direct premiums earned (Lines 1.1 + 1.4 - 1.9 + 1.10) 69,450,796 324,874,725 662,647,626 392,668,018 91,309,900 1,540,951,0651.1 Assumed premiums earned from non-affiliates1.1 Net Assumed less Ceded premiums earned from affiliates1.1 Ceded premiums earned to non-affiliates 134,249 3,100,769 3,235,0181.1 Other Adjustments due to MLR calculation - Premiums1.1 Net premiums earned (Lines 1.11 - 1.5 - 1.8 + 1.12 + 1.13 - 1.14 + 1.15) 69,450,796 324,874,725 662,513,377 392,668,018 88,209,131 1,537,716,047

2. Direct Claims Incurred:2.1 Paid claims during the year 65,704,155 272,274,600 559,519,516 339,611,822 71,973,241 1,309,083,3342.2 Direct claim liability current year 5,474,947 23,887,106 59,906,732 35,891,110 9,623,243 134,783,1382.3 Direct claim liability prior year 6,212,892 28,668,922 57,716,061 30,455,377 10,962,615 134,015,8672.4 Direct claim reserves current year 57,367 207,337 415,296 680,0002.5 Direct claim reserves prior year 52,220 240,408 407,372 700,0002.6 Direct contract reserves current year 889,000 889,0002.7 Direct contract reserves prior year 1,077,000 1,077,0002.8 Paid rate credits2.9 Reserve for rate credits current year2.1 Reserve for rate credits prior year2.1 Incurred medical incentive pools and bonuses (Lines 2.11a + 2.11b - 2.11c) 305,959 1,309,243 2,881,888 1,054,874 5,551,9642.11a Paid medical incentive pools and bonuses current year 185,749 810,418 1,708,708 634,477 3,339,3522.11b Accrued medical incentive pools and bonuses current year 192,182 838,488 1,767,891 656,453 3,455,0142.11c Accrued medical incentive pools and bonuses prior year 71,972 339,663 594,711 236,056 1,242,402

2.1 Net healthcare receivables (Lines 2.12a - 2.12b) 216,185 (2,085,147) (2,476,559) (3,031,330) 52,428 (7,324,423)2.12a Healthcare receivables current year 1,437,992 3,284,292 6,924,693 2,996,428 79,565 14,722,9702.12b Healthcare receivables prior year 1,221,807 5,369,439 9,401,252 6,027,758 27,137 22,047,393

2.1 Group conversion charge2.1 Multi-option coverage blended rate adjustment2.1 Total Incurred Claims (Lines 2.1 + 2.2 - 2.3 + 2.4 - 2.5 + 2.6 - 2.7 + 2.8 + 2.9 -

2.10 + 2.11 - 2.12 + 2.13 + 2.14) 64,873,131 270,854,103 567,076,558 349,133,759 70,581,441 1,322,518,9922.1 Assumed incurred claims from non-affiliates2.1 Net Assumed less ceded incurred claims from affiliates2.1 Ceded Incurred claims to non-affiliates2.1 Other adjustments due to MLR calculation - Claims2.2 Net Incurred Claims (Lines 2.15 - 2.8 - 2.9 + 2.10 + 2.16 + 2.17 - 2.18 + 2.19) 64,873,131 270,854,103 567,076,558 349,133,759 70,581,441 1,322,518,992

3. Fraud and Abuse Recoveries that Reduced PAID Claimsin Line 2.1 above (informational only) 89,645 374,282 816,015 39,364 102,279 1,421,585

27,886,823. . . . . . . . . 0. . . . . . . . .(a) Column 13, Line 1.1 includes direct written premium of $ for stand-alone dental and $ for stand alone vision policies.

53473201321640100

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0000. . . . . . . . .NAIC Group Code BUSINESS IN THE STATE OF RHODE ISLAND DURING THE YEAR 2013 53473. . . . . . . . .NAIC Company Code All Expenses Improving Health Care Quality Expenses Claims Adjustment Expenses 9 10

1 2 3 4 5 6 7 8Improve Activities to Improve Patient Wellness & Health Cost Other Claims General TotalHealth Prevent Hospital Safety and Promotion Total Containment Adjustment Administrative Expenses

Outcomes Readmissions Reduce Medical Errors Activities HIT Expenses (1 to 5) Expenses Expenses Expenses (6 to 9)1. Individual Comprehensive Coverage Expenses:

1.1 0. . . . . . . . .Salaries (including $ for affiliated services) 194,509 43,427 31,122 44,632 60,586 374,276 649,845 623,395 2,243,283 3,890,7991.2 Outsourced services 23,753 589 16,634 75 5,417 46,468 163,050 714,726 2,313,140 3,237,3841.3 0. . . . . . . . .EDP equipment and software (incl $ for affiliated services) 3,355 904 338 499 5,309 10,405 83,401 374,511 502,504 970,8211.4 0. . . . . . . . .Other equipment (excl. EDP) (incl $ for affiliated services) 2,558 690 427 545 596 4,816 8,593 23,943 81,701 119,0531.5 0. . . . . . . . .Accreditation and certification (incl $ for affiliated services) X X X X X X X X X X X X1.6 0. . . . . . . . .Other expenses (incl $ for affiliated services) 169,729 606 338 17,878 5,892 194,443 12,061 379,791 988,625 1,574,9201.7 Subtotal before reimbursements and taxes (1.1 to 1.6) 393,904 46,216 48,859 63,629 77,800 630,408 916,950 2,116,366 6,129,253 9,792,9771.8 Reimbursements by uninsured plans and fiscal intermediaries1.9 Taxes, licenses and fees ( in total, for tying purposes) X X X X X X X X X X X X X X X X X X X X X X X X 1,664,860 1,664,8601.10 Total (1.7 to 1.9) 393,904 46,216 48,859 63,629 77,800 630,408 916,950 2,116,366 7,794,113 11,457,8371.11 Total fraud and abuse detection/recovery expenses included in Col. 7 (informational only) 25,081 25,081

2. Small Group Comprehensive Coverage Expenses:2.1 0. . . . . . . . .Salaries (including $ for affiliated services) 344,276 76,080 41,988 52,719 96,863 611,926 2,303,342 2,023,780 5,506,811 10,445,8592.2 Outsourced services 85,514 1,850 62,122 15,133 9,372 173,991 834,654 3,002,113 6,876,444 10,887,2022.3 0. . . . . . . . .EDP equipment and software (incl $ for affiliated services) 11,808 3,754 1,130 1,609 25,711 44,012 343,894 1,548,811 1,357,656 3,294,3732.4 0. . . . . . . . .Other equipment (excl. EDP) (incl $ for affiliated services) 5,233 1,336 716 866 1,148 9,299 35,907 75,186 243,109 363,5012.5 0. . . . . . . . .Accreditation and certification (incl $ for affiliated services) X X X X X X X X X X X X2.6 0. . . . . . . . .Other expenses (incl $ for affiliated services) 774,978 1,111 515 22,331 21,617 820,552 50,412 1,277,338 19,869,462 22,017,7642.7 Subtotal before reimbursements and taxes (2.1 to 2.6) 1,221,809 84,131 106,471 92,658 154,711 1,659,780 3,568,209 7,927,228 33,853,482 47,008,6992.8 Reimbursements by uninsured plans and fiscal intermediaries2.9 Taxes, licenses and fees ( in total, for tying purposes) X X X X X X X X X X X X X X X X X X X X X X X X 6,690,767 6,690,7672.10 Total (2.7 to 2.9) 1,221,809 84,131 106,471 92,658 154,711 1,659,780 3,568,209 7,927,228 40,544,249 53,699,4662.11 Total raud and abuse detection/recovery expenses included in Col. 7 (informational only) 102,084 102,084

3. Large Group Comprehensive Coverage Expenses:3.1 0. . . . . . . . .Salaries (including $ for affiliated services) 581,130 141,404 71,210 85,718 170,669 1,050,131 3,961,050 2,676,973 7,565,469 15,253,6233.2 Outsourced services 164,161 3,546 93,341 30,220 16,367 307,635 1,394,542 6,652,846 9,849,327 18,204,3503.3 0. . . . . . . . .EDP equipment and software (incl $ for affiliated services) 23,971 8,151 2,388 3,383 56,706 94,599 623,320 2,609,101 1,905,753 5,232,7733.4 0. . . . . . . . .Other equipment (excl. EDP) (incl $ for affiliated services) 9,114 2,451 1,260 1,524 2,048 16,397 66,598 95,743 283,321 462,0593.5 0. . . . . . . . .Accreditation and certification (incl $ for affiliated services) X X X X X X X X X X X X3.6 0. . . . . . . . .Other expenses (incl $ for affiliated services) 1,549,571 2,766 1,259 18,586 36,832 1,609,014 91,560 3,824,619 33,949,466 39,474,6593.7 Subtotal before reimbursements and taxes (3.1 to 3.6) 2,327,947 158,318 169,458 139,431 282,622 3,077,776 6,137,070 15,859,282 53,553,336 78,627,4643.8 Reimbursements by uninsured plans and fiscal intermediaries3.9 Taxes, licenses and fees ( in total, for tying purposes) X X X X X X X X X X X X X X X X X X X X X X X X 12,994,914 12,994,9143.10 Total (3.7 to 3.9) 2,327,947 158,318 169,458 139,431 282,622 3,077,776 6,137,070 15,859,282 66,548,250 91,622,3783.11 Total fraud and abuse detection/recovery expenses included in Col. 7 (informational only) 216,514 216,514

53473201321640100

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1 2 3 4 5 6 7 8 GeneralImprove Activities to Improve Patient Wellness & Health Cost Other Claims Administrative TotalHealth Prevent Hospital Safety and Promotion Total Containment Adjustment Expenses Expenses

Outcomes Readmissions Reduce Medical Errors Activities HIT Expenses (1 to 5) Expenses Expenses (6 to 9)4. Individual Mini-Med Plans Expenses

4.1 0. . . . . . . . .Salaries (including $ for affiliated services)4.2 Outsourced services4.3 0. . . . . . . . .EDP equipment and software (incl $ for affiliated services)4.4 0. . . . . . . . .Other equipment (excl. EDP) (incl $ for affiliated services)4.5 0. . . . . . . . .Accreditation and certification (incl $ for affiliated services) X X X X X X X X X X X X4.6 0. . . . . . . . .Other expenses (incl $ for affiliated services)4.7 Subtotal before reimbursements and taxes (4.1 to 4.6)4.8 Reimbursements by uninsured plans and fiscal intermediaries4.9 Taxes, licenses and fees ( in total, for tying purposes) X X X X X X X X X X X X X X X X X X X X X X X X4.10 Total (4.7 to 4.9)4.11 Total fraud and abuse detection/recovery expenses included in Col. 7 (informational only)

5. Small Group Mini-Med Plans Expenses5.1 0. . . . . . . . .Salaries (including $ for affiliated services)5.2 Outsourced services5.3 0. . . . . . . . .EDP equipment and software (incl $ for affiliated services)5.4 0. . . . . . . . .Other equipment (excl. EDP) (incl $ for affiliated services)5.5 0. . . . . . . . .Accreditation and certification (incl $ for affiliated services) X X X X X X X X X X X X5.6 0. . . . . . . . .Other expenses (incl $ for affiliated services)5.7 Subtotal before reimbursements and taxes (5.1 to 5.6)5.8 Reimbursements by uninsured plans and fiscal intermediaries5.9 Taxes, licenses and fees ( in total, for tying purposes) X X X X X X X X X X X X X X X X X X X X X X X X5.10 Total (5.7 to 5.9)5.11 Total fraud and abuse detection/recovery expenses included in Col. 7 (informational only)

6. Large Group Mini-Med Plans Expenses6.1 0. . . . . . . . .Salaries (including $ for affiliated services)6.2 Outsourced services6.3 0. . . . . . . . .EDP equipment and software (incl $ for affiliated services)6.4 0. . . . . . . . .Other equipment (excl. EDP) (incl $ for affiliated services)6.5 0. . . . . . . . .Accreditation and certification (incl $ for affiliated services) X X X X X X X X X X X X6.6 0. . . . . . . . .Other expenses (incl $ for affiliated services)6.7 Subtotal before reimbursements and taxes (6.1 to 6.6)6.8 Reimbursements by uninsured plans and fiscal intermediaries6.9 Taxes, licenses and fees ( in total, for tying purposes) X X X X X X X X X X X X X X X X X X X X X X X X6.10 Total (6.7 to 6.9)6.11 Total fraud and abuse detection/recovery expenses included in Col. 7 (informational only)

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Outcomes Readmissions Reduce Medical Errors Activities HIT Expenses (1 to 5) Expenses Expenses (6 to 9)7. Small Group Expatriate Plans Expenses

7.1 0. . . . . . . . .Salaries (including $ for affiliated services)7.2 Outsourced services7.3 0. . . . . . . . .EDP equipment and software (incl $ for affiliated services)7.4 0. . . . . . . . .Other equipment (excl. EDP) (incl $ for affiliated services)7.5 0. . . . . . . . .Accreditation and certification (incl $ for affiliated services) X X X X X X X X X X X X7.6 0. . . . . . . . .Other expenses (incl $ for affiliated services)7.7 Subtotal before reimbursements and taxes (7.1 to 7.6)7.8 Reimbursements by uninsured plans and fiscal intermediaries7.9 Taxes, licenses and fees ( in total, for tying purposes) X X X X X X X X X X X X X X X X X X X X X X X X7.10 Total (7.7 to 7.9)7.11 Total fraud and abuse detection/recovery expenses included in Col. 7 (informational only)

8. Large Group Expatriate Plans Expenses8.1 0. . . . . . . . .Salaries (including $ for affiliated services)8.2 Outsourced services8.3 0. . . . . . . . .EDP equipment and software (incl $ for affiliated services)8.4 0. . . . . . . . .Other equipment (excl. EDP) (incl $ for affiliated services)8.5 0. . . . . . . . .Accreditation and certification (incl $ for affiliated services) X X X X X X X X X X X X8.6 0. . . . . . . . .Other expenses (incl $ for affiliated services)8.7 Subtotal before reimbursements and taxes (8.1 to 8.6)8.8 Reimbursements by uninsured plans and fiscal intermediaries8.9 Taxes, licenses and fees ( in total, for tying purposes) X X X X X X X X X X X X X X X X X X X X X X X X8.10 Total (8.7 to 8.9)8.11 Total fraud and abuse detection/recovery expenses included in Col. 7 (informational only)

9. Student Health Plans Expenses9.1 0. . . . . . . . .Salaries (including $ for affiliated services)9.2 Outsourced services9.3 0. . . . . . . . .EDP equipment and software (incl $ for affiliated services)9.4 0. . . . . . . . .Other equipment (excl. EDP) (incl $ for affiliated services)9.5 0. . . . . . . . .Accreditation and certification (incl $ for affiliated services) X X X X X X X X X X X X9.6 0. . . . . . . . .Other expenses (incl $ for affiliated services)9.7 Subtotal before reimbursements and taxes (9.1 to 9.6)9.8 Reimbursements by uninsured plans and fiscal intermediaries9.9 Taxes, licenses and fees ( in total, for tying purposes) X X X X X X X X X X X X X X X X X X X X X X X X9.10 Total (9.7 to 9.9)9.11 Total fraud and abuse detection/recovery expenses included in Col. 7 (informational only)

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Comprehensive Health Coverage Mini-Med Plans Expatriate Plans 9 Government1 2 3 4 5 6 7 8 Student Business Other


1. Premium:1.1 Health Premiums Earned (From Part 2, Line 1.11) 144,745,872 307,748,826 599,062,374 497,507,433 95,794,024 1,644,858,529 X X X 1,644,858,5291.2 Federal High Risk Pools 250,005 250,005 X X X 250,0051.3 State High Risk Pools X X X1.4 Premiums Earned Including State and Federal High Risk Programs (Lines 1.1 + 1.2 + 1.3) 144,995,877 307,748,826 599,062,374 497,507,433 95,794,024 1,645,108,534 X X X 1,645,108,5341.5 Federal Taxes and Federal Assessments1.6 0. . . . . . . .State Insurance, Premium and Other Taxes (Similar Local Taxes of $ ) 2,960,911 6,291,427 9,930,280 1,742,795 20,925,413 20,925,413

1.6a Community Benefit Expenditures (Informational Only)1.7 Regulatory Authority Licenses and Fees 41,578 26,248 31,920 28,991 44,704 173,441 25,616 199,0571.8 Adjusted Premiums Earned (Lines 1.4 - 1.5 - 1.6 - 1.7) 141,993,388 301,431,151 589,100,174 497,478,442 94,006,525 1,624,009,680 X X X 1,623,984,0641.9 Net Assumed Less Ceded Reinsurance Premiums Earned (1,763,125) (114,021) (2,692,613) (4,569,759) X X X (4,569,759)1.10 Other Adjustments Due to MLR Calculations - Premiums X X X1.11 Risk Revenue X X X1.12 Net Adjusted Premiums Earned After Reinsurance (Lines 1.8 + 1.9 + 1.10 + 1.11) 140,230,263 301,431,151 588,986,153 497,478,442 91,313,912 1,619,439,921 X X X 1,619,414,305

2. Claims:2.1 Incurred Claims Excluding Prescription Drugs 96,874,312 206,617,785 432,172,075 400,601,494 70,914,046 1,207,179,712 X X X 1,207,179,7122.2 Prescription Drugs 33,317,944 39,982,643 79,563,654 67,836,359 170,040 220,870,640 X X X 220,870,6402.3 Pharmaceutical Rebates 1,266,232 3,127,367 4,318,744 10,410,079 19,122,422 X X X 19,122,4222.4 State Stop Loss, Market Stabilization and Claim/Census Based

Assessments (Informational Only) X X X3. Incurred Medical Incentive Pools and Bonuses 1,613,228 3,175,144 4,919,998 4,756,277 14,464,647 X X X 14,464,6474. Deductible Fraud and Abuse Detection/Recovery Expenses (For MLR Use Only) 34,879 77,383 175,930 26,056 23,174 337,422 337,4225. 5.0 Total Incurred Claims (Lines 2.1 + 2.2 - 2.3 + 3) (From Part 2, Line 2.15) 130,539,252 246,648,205 512,336,983 462,784,051 71,084,086 1,423,392,577 X X X 1,423,392,577

5.1 Net Assumed Less Ceded Reinsurance Claims Incurred X X X5.2 Other Adjustments Due to MLR calculations - Claims (19,368,632) (19,368,632) X X X (19,368,632)5.3 Rebates Paid X X X X X X X X X X X X5.4 Estimated Rebates Unpaid Prior Year X X X X X X X X X X X X5.5 Estimated Rebates Unpaid Current Year X X X X X X X X X X X X5.6 Fee For Service and Co-Pay Revenue X X X5.7 Net Incurred Claims After Reinsurance (Lines 5.0 + 5.1 + 5.2 + 5.3 - 5.4 + 5.5 - 5.6) 111,170,620 246,648,205 512,336,983 462,784,051 71,084,086 1,404,023,945 X X X 1,404,023,945

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Comprehensive Health Coverage Mini-Med Plans Expatriate Plans 9 Government1 2 3 4 5 6 7 8 Student Business Other


6. Improving Health Care Quality Expenses Incurred:6.1 Improve Health Outcomes 258,098 726,079 1,493,128 1,613,170 23,160 4,113,635 610,290 4,723,9256.2 Activities to Prevent Hospital Readmissions 31,999 54,977 144,062 300,686 4,683 536,407 189,720 726,1276.3 Improve Patient Safety and Reduce Medical Errors 107,386 18,567 328,963 499,392 3,252 957,560 96,341 1,053,9016.4 Wellness and Health Promotion Activities 49,734 63,936 142,084 248,877 2,924 507,555 121,122 628,6776.5 Health Information Technology Expenses Related to Health Improvement 69,015 122,833 267,662 413,017 25,917 898,444 346,837 1,245,2816.6 Total of Defined Expenses Incurred for Improving Health Care Quality (Lines 6.1 + 6.2 +

6.3 + 6.4 + 6.5) 516,232 986,392 2,375,899 3,075,142 59,936 7,013,601 1,364,310 8,377,9117. Preliminary Medical Loss Ratio: MLR (Lines 4 + 5.0 + 6.6) / Line 1.8 0.923 0.822 0.874 X X X X X X X X X X X X X X X X X X8. Claims Adjustment Expenses:

8.1 Cost Containment Expenses Not Included in Quality of Care Expenses in Line 6.6 1,897,592 3,441,440 5,746,377 11,263,282 40,337 22,389,028 8,491,637 30,880,6658.2 All Other Claims Adjustment Expenses 3,745,381 7,194,610 13,184,539 12,338,046 3,870,808 40,333,384 19,644,203 59,977,5878.3 Total Claims Adjustment Expenses (Lines 8.1 + 8.2) 5,642,973 10,636,050 18,930,916 23,601,328 3,911,145 62,722,412 28,135,840 90,858,252

9. Claims Adjustment Expense Ratio (Line 8.3 / Line 1.8) 0.040 0.035 0.032 0.047 0.042 X X X X X X X X X10. General and Administrative (G&A) Expenses:

10.1 Direct Sales Salaries and Benefits 2,123,614 3,986,199 5,195,477 7,193,211 2,668,853 21,167,354 5,890,221 27,057,57510.2 Agents and Brokers Fees and Commissions 6,387,727 9,838,342 3,241,654 1,108,704 20,576,427 158,000 20,734,42710.3 Other Taxes (Excluding Taxes on Lines 1.5 Through 1.7 and Line 14 Below) 30,430 76,028 114,876 123,359 42,334 387,027 119,506 506,53310.4 Other General and Administrative Expenses 9,466,700 27,512,108 47,586,763 30,247,209 4,274,365 119,087,145 7,800,533 126,887,678

10.4a Community Benefit Expenditures (Informational Only)10.5 Total General and Administrative (Lines 10.1 + 10.2 + 10.3 + 10.4) 11,620,744 37,962,062 62,735,458 40,805,433 8,094,256 161,217,953 13,968,260 175,186,213

11. Underwriting Gain / (Loss) (Lines 1.12 - 5.7 - 6.6 - 8.3 - 10.5) 11,279,694 5,198,442 (7,393,103) (32,787,512) 8,164,489 (15,537,990) X X X (59,032,016)12. Income From Fees of Uninsured Plans X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 43,494,026 43,494,02613. Net Investment and Other Gain / (Loss) X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 15,763,984 X X X 15,763,98414. Federal Income Taxes (Excluding Taxes on Line 1.5 Above) X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 112,763 X X X 112,76315. Net Gain or (Loss) (Lines 11 + 12 + 13 - 14) X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X 113,231 X X X 113,23116. ICD-10 Implementation Expenses (Informational Only; Already Included

in General Expenses and Line 6.5) 36,780 65,058 119,370 138,178 96,360 455,746 174,481 630,22716a ICD-10 Implementation Expenses (Informational Only; Already Included in Line 6.5)OTHER INDICATORS:

1. Number of Certificates / Policies 25,236 26,516 56,347 58,112 113,001 279,212 67,497 346,7092. Number of Covered Lives 36,173 51,372 116,489 58,512 194,166 456,712 162,134 618,8463. Number of Groups X X X 6,528 466 X X X 684 453 8,131 19 8,1504. Member Months 404,631 659,490 1,406,009 675,514 2,341,643 5,487,287 1,967,221 7,454,508

Is run-off business reported in Columns 1 through 9? Yes [ ] No [ X ] 0. . . . . . . . 0. . . . . . . .If yes, show the amount of premiums and claims included: Premiums $ , Claims $

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Save Date: 03/28/2015 01:09:20 PM

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0000. . . . . . . . .NAIC Group Code BUSINESS IN THE STATE OF RHODE ISLAND DURING THE YEAR 2014 53473. . . . . . . . .NAIC Company Code Business Subject to MLR 10 11 12 13

Comprehensive Health Coverage Mini-Med Plans Expatriate Plans 91 2 3 4 5 6 7 8 Government

Student Business OtherSmall Group Large Group Small Group Large Group Small Large Health (excluded by Health Aggregate Total

Individual Employer Employer Individual Employer Employer Group Group Plans statute) Business (2% Rule) (a)1. Health Premiums Earned:

1.1 Direct Premiums Written 144,995,877 307,748,826 595,576,140 497,507,433 95,794,024 1,641,622,3001.2 Unearned Premium Prior Year 23,251,448 23,251,4481.3 Unearned Premium Current Year 19,765,214 19,765,2141.4 Change in Unearned Premium (Lines 1.2 - 1.3) 3,486,234 3,486,2341.5 Paid Rate Credits1.6 Reserve for Rate Credits Current Year1.7 Reserve for Rate Credits Prior Year1.8 Change in Reserve for Rate Credits (Lines 1.6 - 1.7)1.9 Premium Balances Written Off

1.10 Group Conversion Charge1.11 Total Direct Premiums Earned (Lines 1.1 + 1.4 - 1.9 + 1.10) 144,995,877 307,748,826 599,062,374 497,507,433 95,794,024 1,645,108,5341.12 Assumed Premiums Earned from Non-Affiliates1.13 Net Assumed Less Ceded Premiums Earned from Affiliates1.14 Ceded Premiums Earned to Non-Affiliates 1,763,125 114,021 2,692,613 4,569,7591.15 Other Adjustments Due to MLR Calculation - Premiums1.16 Net Premiums Earned (Lines 1.11 - 1.5 - 1.8 + 1.12 + 1.13 - 1.14 + 1.15) 143,232,752 307,748,826 598,948,353 497,507,433 93,101,411 1,640,538,775

2. Direct Claims Incurred:2.1 Paid Claims During the Year 121,836,705 244,483,767 519,771,209 456,322,871 71,246,125 1,413,660,6772.2 Direct Claim Liability Current Year 10,088,072 22,426,930 46,660,788 40,521,622 9,466,079 129,163,4912.3 Direct Claim Liability Prior Year 5,474,947 23,887,106 59,906,732 35,891,110 9,623,243 134,783,1382.4 Direct Claim Reserves Current Year 111,837 135,257 312,906 560,0002.5 Direct Claim Reserves Prior Year 57,367 207,337 415,296 680,0002.6 Direct Contract Reserves Current Year 3,161,000 3,161,0002.7 Direct Contract Reserves Prior Year 889,000 889,0002.8 Paid Rate Credits2.9 Reserve for Rate Credits Current Year

2.10 Reserve for Rate Credits Prior Year2.11 Incurred Medical Incentive Pools and Bonuses (Lines 2.11a + 2.11b - 2.11c) 1,613,228 3,175,144 4,919,998 4,756,277 14,464,647

2.11a Paid Medical Incentive Pools and Bonuses Current Year 607,431 1,350,388 2,250,143 1,209,021 5,416,9832.11b Accrued Medical Incentive Pools and Bonuses Current Year 1,197,979 2,663,244 4,437,746 4,203,709 12,502,6782.11c Accrued Medical Incentive Pools and Bonuses Prior Year 192,182 838,488 1,767,891 656,453 3,455,014

2.12 Net Health Care Receivables (Lines 2.12a - 2.12b) (149,725) (521,549) (994,110) 2,925,609 4,875 1,265,1002.12a Health Care Receivables Current Year 1,288,267 2,762,743 5,930,583 5,922,037 84,440 15,988,0702.12b Health Care Receivables Prior Year 1,437,992 3,284,292 6,924,693 2,996,428 79,565 14,722,970

2.13 Group Conversion Charge2.14 Multi-Option Coverage Blended Rate Adjustment2.15 Total Incurred Claims (Lines 2.1 + 2.2 - 2.3 + 2.4 - 2.5 + 2.6 - 2.7 + 2.8 + 2.9 -

2.10 + 2.11 - 2.12 + 2.13 + 2.14) 130,539,253 246,648,204 512,336,983 462,784,051 71,084,086 1,423,392,5772.16 Assumed Incurred Claims from Non-Affiliates2.17 Net Assumed Less Ceded Incurred Claims from Affiliates2.18 Ceded Incurred Claims to Non-Affiliates2.19 Other Adjustments Due to MLR Calculation - Claims2.20 Net Incurred Claims (Lines 2.15 - 2.8 - 2.9 + 2.10 + 2.16 + 2.17 - 2.18 + 2.19) 130,539,253 246,648,204 512,336,983 462,784,051 71,084,086 1,423,392,577

3. Fraud and Abuse Recoveries that Reduced PAID Claimsin Line 2.1 Above (Informational Only) 34,879 77,383 175,930 26,056 23,174 337,422

0. . . . . . . . . 0. . . . . . . . .(a) Column 13, Line 1.1 includes direct written premium of $ for stand-alone dental and $ for stand alone vision policies.

53473201421640100

Save Date: 03/28/2015 09:45:51 AM

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1 2 3 4 5 6 7 8Improve Activities to Improve Patient Wellness & Health Cost Other Claims General TotalHealth Prevent Hospital Safety and Promotion Total Containment Adjustment Administrative Expenses

Outcomes Readmissions Reduce Medical Errors Activities HIT Expenses (1 to 5) Expenses Expenses Expenses (6 to 9)1. Individual Comprehensive Coverage Expenses:

1.1 0. . . . . . . . .Salaries (Including $ For Affiliated Services) 160,376 29,545 15,152 20,089 28,298 253,460 796,694 1,128,495 3,796,552 5,975,2011.2 Outsourced Services (38,521) 912 90,617 693 29,104 82,805 925,570 1,076,105 2,679,203 4,763,6831.3 0. . . . . . . . .EDP Equipment and Software (Incl $ For Affiliated Services) 31,248 746 1,186 399 6,560 40,139 138,315 834,997 821,135 1,834,5861.4 0. . . . . . . . .Other Equipment (excl. EDP) (Incl $ For Affiliated Services) 1,739 351 183 214 445 2,932 17,414 43,394 222,711 286,4511.5 0. . . . . . . . .Accreditation and Certification (Incl $ For affiliated Aervices) X X X X X X X X X X X X1.6 0. . . . . . . . .Other Expenses (Incl $ For Affiliated Services) 103,256 446 248 28,340 4,607 136,897 19,598 662,391 4,095,926 4,914,8121.7 Subtotal Before Reimbursements and Taxes (1.1 to 1.6) 258,098 32,000 107,386 49,735 69,014 516,233 1,897,591 3,745,382 11,615,527 17,774,7331.8 Reimbursements by Uninsured Plans and Fiscal Intermediaries1.9 Taxes, Licenses and Fees (In Total, For Tying Purposes) X X X X X X X X X X X X X X X X X X X X X X X X 3,005,480 3,005,4801.10 Total (1.7 to 1.9) 258,098 32,000 107,386 49,735 69,014 516,233 1,897,591 3,745,382 14,621,007 20,780,2131.11 Total Fraud and Abuse Detection/Recovery Expenses Included in Col. 7 (Informational Only) 55,387 55,387

2. Small Group Comprehensive Coverage Expenses:2.1 0. . . . . . . . .Salaries (Including $ For Affiliated Services) 279,818 50,566 25,729 32,466 49,760 438,339 1,922,634 1,771,278 8,124,239 12,256,4902.2 Outsourced Services (62,270) 1,456 (10,122) 1,107 50,244 (19,585) 1,168,834 2,450,658 5,942,828 9,542,7352.3 0. . . . . . . . .EDP Equipment and Software (Incl $ For Affiliated Services) 50,905 1,192 1,895 638 10,528 65,158 256,302 1,616,749 1,843,229 3,781,4382.4 0. . . . . . . . .Other Equipment (excl. EDP) (Incl $ For Affiliated Services) 3,748 764 425 529 995 6,461 44,030 74,234 510,165 634,8902.5 0. . . . . . . . .Accreditation and Certification (Incl $ For Affiliated Services) X X X X X X X X X X X X2.6 0. . . . . . . . .Other Expenses (Incl $ For Affiliated Services) 453,879 999 640 29,196 11,308 496,022 49,639 1,281,691 21,414,350 23,241,7022.7 Subtotal Before Reimbursements and Taxes (2.1 to 2.6) 726,080 54,977 18,567 63,936 122,835 986,395 3,441,439 7,194,610 37,834,811 49,457,2552.8 Reimbursements by Uninsured Plans and Fiscal Intermediaries2.9 Taxes, Licenses and Fees (In Total, For Tying Purposes) X X X X X X X X X X X X X X X X X X X X X X X X 6,324,102 6,324,1022.10 Total (2.7 to 2.9) 726,080 54,977 18,567 63,936 122,835 986,395 3,441,439 7,194,610 44,158,913 55,781,3572.11 Total Fraud and Abuse Detection/Recovery Expenses Included in Col. 7 (Informational Only) 102,706 102,706

3. Large Group Comprehensive Coverage Expenses:3.1 0. . . . . . . . .Salaries (Including $ For Affiliated Services) 587,734 132,260 66,643 89,040 114,388 990,065 3,481,895 2,727,543 11,063,466 18,262,9693.2 Outsourced Services (102,417) 4,048 254,438 3,066 103,992 263,127 1,627,901 4,487,629 9,166,319 15,544,9763.3 0. . . . . . . . .EDP Equipment and Software (Incl $ For Affiliated Services) 94,979 3,316 5,271 1,773 29,197 134,536 460,326 2,715,941 1,556,484 4,867,2873.4 0. . . . . . . . .Other Equipment (excl. EDP) (Incl $ For Affiliated Services) 7,953 1,901 1,031 1,273 2,239 14,397 89,187 103,572 709,335 916,4913.5 0. . . . . . . . .Accreditation and Certification (Incl $ For Affiliated Services) X X X X X X X X X X X X3.6 0. . . . . . . . .Other Expenses (Incl $ For Affiliated Services) 904,879 2,537 1,580 46,932 17,846 973,774 87,069 3,149,854 40,376,713 44,587,4103.7 Subtotal Before Reimbursements and Taxes (3.1 to 3.6) 1,493,128 144,062 328,963 142,084 267,662 2,375,899 5,746,378 13,184,539 62,872,317 84,179,1333.8 Reimbursements by Uninsured Plans and Fiscal Intermediaries3.9 Taxes, Licenses and Fees (In Total, For Tying Purposes) X X X X X X X X X X X X X X X X X X X X X X X X 9,974,748 9,974,7483.10 Total (3.7 to 3.9) 1,493,128 144,062 328,963 142,084 267,662 2,375,899 5,746,378 13,184,539 72,847,065 94,153,8813.11 Total Fraud and Abuse Detection/Recovery Expenses Included in Col. 7 (Informational Only) 215,615 215,615

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Outcomes Readmissions Reduce Medical Errors Activities HIT Expenses (1 to 5) Expenses Expenses (6 to 9)4. Individual Mini-Med Plans Expenses

4.1 0. . . . . . . . .Salaries (Including $ For Affiliated Services)4.2 Outsourced Services4.3 0. . . . . . . . .EDP Equipment and Software (Incl $ For Affiliated Services)4.4 0. . . . . . . . .Other Equipment (excl. EDP) (Incl $ For Affiliated Services)4.5 0. . . . . . . . .Accreditation and Certification (Incl $ For Affiliated Services) X X X X X X X X X X X X4.6 0. . . . . . . . .Other Expenses (Incl $ For Affiliated Services)4.7 Subtotal Before Reimbursements and Taxes (4.1 to 4.6)4.8 Reimbursements by Uninsured Plans and Fiscal Intermediaries4.9 Taxes, Licenses and Fees (In Total, For Tying Purposes) X X X X X X X X X X X X X X X X X X X X X X X X4.10 Total (4.7 to 4.9)4.11 Total Fraud and Abuse Detection/Recovery Expenses Included in Col. 7 (Informational Only)

5. Small Group Mini-Med Plans Expenses5.1 0. . . . . . . . .Salaries (Including $ For Affiliated Services)5.2 Outsourced Services5.3 0. . . . . . . . .EDP Equipment and Software (Incl $ For Affiliated Services)5.4 0. . . . . . . . .Other Equipment (excl. EDP) (Incl $ For Affiliated Services)5.5 0. . . . . . . . .Accreditation and Certification (incl $ For Affiliated Services) X X X X X X X X X X X X5.6 0. . . . . . . . .Other Expenses (Incl $ For Affiliated Services)5.7 Subtotal Before Reimbursements and Taxes (5.1 to 5.6)5.8 Reimbursements by Uninsured Plans and Fiscal Intermediaries5.9 Taxes, Licenses and Fees (In Total, For Tying Purposes) X X X X X X X X X X X X X X X X X X X X X X X X5.10 Total (5.7 to 5.9)5.11 Total Fraud and Abuse Detection/Recovery Expenses Included in Col. 7 (Informational Only)

6. Large Group Mini-Med Plans Expenses6.1 0. . . . . . . . .Salaries (Including $ For Affiliated Services)6.2 Outsourced Services6.3 0. . . . . . . . .EDP Equipment and Software (Incl $ For Affiliated Services)6.4 0. . . . . . . . .Other Equipment (excl. EDP) (Incl $ For Affiliated Services)6.5 0. . . . . . . . .Accreditation and Certification (Incl $ For Affiliated Services) X X X X X X X X X X X X6.6 0. . . . . . . . .Other Expenses (Incl $ For Affiliated Services)6.7 Subtotal Before Reimbursements and Taxes (6.1 to 6.6)6.8 Reimbursements by Uninsured Plans and Fiscal Intermediaries6.9 Taxes, Licenses and Fees (In Total, For Tying Purposes) X X X X X X X X X X X X X X X X X X X X X X X X6.10 Total (6.7 to 6.9)6.11 Total Fraud and Abuse Detection/Recovery Expenses Included in Col. 7 (Informational Only)

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Outcomes Readmissions Reduce Medical Errors Activities HIT Expenses (1 to 5) Expenses Expenses (6 to 9)7. Small Group Expatriate Plans Expenses

7.1 0. . . . . . . . .Salaries (Including $ For Affiliated Services)7.2 Outsourced Services7.3 0. . . . . . . . .EDP Equipment and Software (Incl $ For Affiliated Services)7.4 0. . . . . . . . .Other Equipment (excl. EDP) (Incl $ For Affiliated Services)7.5 0. . . . . . . . .Accreditation and Certification (Incl $ For Affiliated Services) X X X X X X X X X X X X7.6 0. . . . . . . . .Other Expenses (Incl $ For Affiliated Services)7.7 Subtotal Before Reimbursements and Taxes (7.1 to 7.6)7.8 Reimbursements by Uninsured Plans and Fiscal Intermediaries7.9 Taxes, Licenses and Fees (In Total, For Tying Purposes) X X X X X X X X X X X X X X X X X X X X X X X X7.10 Total (7.7 to 7.9)7.11 Total Fraud and Abuse Detection/Recovery Expenses Included in Col. 7 (Informational Only)

8. Large Group Expatriate Plans Expenses8.1 0. . . . . . . . .Salaries (Including $ For Affiliated Services)8.2 Outsourced Services8.3 0. . . . . . . . .EDP Equipment and Software (Incl $ For Affiliated Services)8.4 0. . . . . . . . .Other Equipment (excl. EDP) (Incl $ For Affiliated Services)8.5 0. . . . . . . . .Accreditation and Certification (Incl $ For Affiliated Services) X X X X X X X X X X X X8.6 0. . . . . . . . .Other Expenses (Incl $ For Affiliated Services)8.7 Subtotal Before Reimbursements and Taxes (8.1 to 8.6)8.8 Reimbursements by Uninsured Plans and Fiscal Intermediaries8.9 Taxes, Licenses and Fees (In Total, For Tying Purposes) X X X X X X X X X X X X X X X X X X X X X X X X8.10 Total (8.7 to 8.9)8.11 Total Fraud and Abuse Detection/Recovery Expenses Included in Col. 7 (Informational Only)

9. Student Health Plans Expenses9.1 0. . . . . . . . .Salaries (Including $ For Affiliated Services)9.2 Outsourced Services9.3 0. . . . . . . . .EDP Equipment and Software (incl $ For Affiliated Services)9.4 0. . . . . . . . .Other Equipment (excl. EDP) (Incl $ For Affiliated Services)9.5 0. . . . . . . . .Accreditation and Certification (incl $ For Affiliated Services) X X X X X X X X X X X X9.6 0. . . . . . . . .Other Expenses (Incl $ For Affiliated Services)9.7 Subtotal Before Reimbursements and Taxes (9.1 to 9.6)9.8 Reimbursements by Uninsured Plans and Fiscal Intermediaries9.9 Taxes, Licenses and Fees (In Total, For Tying Purposes) X X X X X X X X X X X X X X X X X X X X X X X X9.10 Total (9.7 to 9.9)9.11 Total Fraud and Abuse Detection/Recovery Expenses Included in Col. 7 (Informational Only)

NONE

Save Date: 03/30/2015 08:50:12 AM

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Supporting Documentation Rationale for June 1, 2015 Changes

Blue Cross & Blue Shield of Rhode Island – Direct Pay Filing

The revised filing reflects a decision by Blue Cross & Blue Shield of Rhode Island (“BCBSRI”) to change its plan offerings in the Direct Pay market. Specifically, BCBSRI has determined that the BlueCHiP Advance plan may not meet consumer demand in the individual market at this time. Direct Pay subscribers are not accustomed to a tiered network, referral model plan. Therefore, we have modified the plan – now called BlueCHiP Direct – to retain the referral model and still provide access to our full Rhode Island network. (Also included are providers in counties in Massachusetts and Connecticut that are contiguous to Rhode Island and who contract directly with BCBSRI.) This plan will not provide any out of network benefits except in the case of emergency care. Both the form and associated rate filing have been modified to reflect this change. In addition, the rate filing has been modified to reflect the following:

The name and HIOS ID have been added for BlueCHiP Direct and have been removed for BlueCHiP Advance.

Benefit factors associated with the BlueCHiP Direct plan design have been added to the filing, and this change flows through to other factors that are calculations based upon this factor. The change results in a change to the overall average increase for the EHB rate of .1%. As a result, the EHB increase for a 21 year old in this filing is 18.0%. The URRT has also been updated accordingly.

Tab III (Rates & Benefits) of the OHIC Template has been updated to show the premium for a 21 year old instead of showing average premium.

Also on Tab III of the OHIC Template, the name and HIOS ID for the Blue Solutions for HSA 3700 plan has been changed to reflect that abortion coverage is included in this plan. On/Off Exchange indicators were identified as being incorrect for plans that include pediatric dental coverage and have been corrected in Tab III. All plans offered on Exchange in the individual market will include pediatric dental benefits.

The Actuarial Memorandum has been updated to reflect the revised MLR resulting from the changes above.

Changes to the inputs in the rate filing templates are highlighted in yellow.

Supporting Document Schedules Bypassed - Item: Actuarial Memorandum and CertificationsBypass Reason: See rate/rule schedule for more detailsAttachment(s):Item Status:Status Date:

Bypassed - Item: Consumer Disclosure FormBypass Reason: See rate/rule schedule for more detailsAttachment(s):Item Status:Status Date:

Bypassed - Item: Rate Summary WorksheetBypass Reason: Populate upon approvalAttachment(s):Item Status:Status Date:

Bypassed - Item: OHIC 2016 Individual Rate TemplateBypass Reason: See rate/rule schedule for more detailsAttachment(s):Item Status:Status Date:

Bypassed - Item: OHIC 2016 Individual Rate InstructionsBypass Reason: See rate/rule schedule for more detailsAttachment(s):Item Status:Status Date:

Bypassed - Item: OHIC 2016 Market and Rating RulesBypass Reason: See rate/rule schedule for more detailsAttachment(s):Item Status:Status Date:













Superseded Schedule Items Please note that all items on the following pages are items, which have been replaced by a newer version. The newest version is located with the appropriate scheduleon previous pages. These items are in date order with most recent first.

Creation Date

Schedule Item

Status Schedule Schedule Item Name

Replacement

Creation Date Attached Document(s)05/15/2015 Rate 2016 Individual - Consumer Narrative 06/01/2015 2016 Individual - Consumer

Narrative FINAL.pdf (Superceded)05/15/2015 Rate 2016 Individual - Actuarial Memo 06/01/2015 2016 Individual - Actuarial Memo

FINAL.pdf (Superceded)Care Transformation Collaborativeof RI - CY2014 Ledgers.pdfCare Transformation Collaborativeof RI - CY2014 Invoices.pdfCurrent Care - CY2014 Invoices.pdf2016 Individual - Addendum BFINAL.pdf2016 Individual - Appendices.pdf(Superceded)

05/15/2015 Rate 2016 Individual - OHIC Rate ReviewTemplate

06/01/2015 2016 Individual Rate Filing OHICTemplate FINAL.pdf (Superceded)

05/15/2015 Rate 2016 Individual - Unified Rate ReviewTemplate

05/15/2015 Unified_Rate_Review_Ind_2016_Filing.pdf (Superceded)








1


Scope and Range of the Rate Increase: The overall average rate increase in the filing is 17.9%. The actual increase for an individual now enrolled will vary based upon:








Premium is driven mainly by the cost of health services BCBSRI pays on behalf of our members. These medical expenses make up more than 79% of each premium dollar BCBSRI collects in the direct pay market. Medical expenses are driven by:





2

Changes in Benefits: At the same time as this filing, BCBSRI submitted plans to the Office of Health Insurance Commissioner for approval. The plan filing makes minor changes to current plans. This includes changes to cost sharing amounts and annual out of pocket maximums consistent with federal regulations. Benefit changes will take effect on January 1, 2016. BCBSRI will also add five new plans to the direct pay market in 2016, including a new tiered network plan. From November 1, 2015 through January 31, 2016 (open enrollment), individuals will have the choice of any plan offered in the direct pay market. As of January 1, 2016, BCBSRI will no longer offer five plans in the direct pay market. The plans that will no longer be offered are VantageBlue Direct 5800/11600, VantageBlue SelectRI Direct 500/1000, VantageBlue Select RI Direct 3000/6000, VantageBlue SelectRI Direct 5800/11600, and BasicBlue Direct. Members that are now enrolled in one of these plans will receive notice that their plan will no longer be available after December 31, 2015. Members will have the option to select any other plan offered in the direct pay market. We will help these members select a new plan that meets their needs.

A. On-system Claims

Paid Allowed


Other


Other

Professional Rx Other Claims1/1/2014 $2,161,565 $1,528,682 $332,858 $1,304,331 $1,069,427 0.0000 $2,420,980 $2,328,056 $473,497 $2,456,933 $1,485,991 0.0000

2/1/2014 $2,938,354 $1,870,768 $344,768 $1,503,868 $1,246,334 0.0000 $3,096,517 $2,523,379 $479,550 $2,508,299 $1,633,511 0.0000

3/1/2014 $2,587,058 $2,447,243 $449,955 $2,037,614 $1,715,464 0.0000 $2,793,436 $3,141,163 $608,302 $3,186,286 $2,110,061 0.0000

4/1/2014 $2,981,612 $2,985,291 $521,973 $2,479,632 $1,900,887 0.0000 $3,152,275 $3,752,783 $698,518 $3,673,266 $2,329,560 0.0000

5/1/2014 $2,979,030 $3,030,461 $552,301 $2,655,935 $2,200,886 0.0000 $3,128,764 $3,854,468 $734,503 $3,876,020 $2,669,964 0.0000

6/1/2014 $3,315,851 $3,339,801 $566,607 $2,695,873 $2,318,612 0.0000 $3,477,264 $4,140,819 $727,473 $3,823,505 $2,732,775 0.0000

7/1/2014 $3,602,792 $3,512,846 $563,005 $2,866,810 $2,461,024 0.0000 $3,764,895 $4,195,786 $715,282 $3,922,876 $2,876,514 0.0000

8/1/2014 $3,207,649 $3,527,177 $540,148 $2,777,637 $2,528,871 0.0000 $3,343,195 $4,118,942 $676,672 $3,720,192 $2,915,970 0.0000

9/1/2014 $3,662,865 $3,630,805 $595,996 $3,038,905 $2,533,310 0.0000 $3,835,742 $4,226,257 $738,900 $4,005,982 $2,907,793 0.0000

10/1/2014 $3,347,688 $4,100,304 $624,090 $3,388,110 $2,531,454 0.0000 $3,480,595 $4,690,065 $771,123 $4,417,418 $2,953,984 0.0000

11/1/2014 $2,552,344 $3,345,647 $536,053 $2,863,531 $2,369,192 0.0000 $2,693,134 $3,840,315 $655,169 $3,707,531 $2,750,727 0.0000

12/1/2014 $3,497,075 $3,521,536 $587,450 $3,143,872 $2,707,141 0.0000 $3,627,179 $4,084,781 $722,385 $3,968,892 $3,122,194 0.0000

B. IBNR Adjustment (Divisional)

Paid Allowed


Other


Other

Professional Rx Other Claims1/1/2014 0.9996 0.9997 0.9992 0.9992 1.0000 1.0000 0.9996 0.9997 0.9992 0.9992 1.0000 1.0000

2/1/2014 0.9999 0.9994 0.9990 0.9990 1.0000 1.0000 0.9999 0.9994 0.9990 0.9990 1.0000 1.0000

3/1/2014 0.9870 0.9995 0.9984 0.9984 1.0000 1.0000 0.9870 0.9995 0.9984 0.9984 1.0000 1.0000

4/1/2014 0.9988 0.9982 0.9977 0.9977 1.0000 1.0000 0.9988 0.9982 0.9977 0.9977 1.0000 1.0000

5/1/2014 0.9899 0.9956 0.9968 0.9968 1.0000 1.0000 0.9899 0.9956 0.9968 0.9968 1.0000 1.0000

6/1/2014 1.0242 0.9949 0.9948 0.9948 1.0000 1.0000 1.0242 0.9949 0.9948 0.9948 1.0000 1.0000

7/1/2014 0.9993 0.9937 0.9932 0.9932 1.0000 1.0000 0.9993 0.9937 0.9932 0.9932 1.0000 1.0000

8/1/2014 0.9951 0.9928 0.9911 0.9911 1.0000 1.0000 0.9951 0.9928 0.9911 0.9911 1.0000 1.0000

9/1/2014 0.9873 0.9900 0.9868 0.9868 0.9999 1.0000 0.9873 0.9900 0.9868 0.9868 0.9999 1.0000

10/1/2014 0.9766 0.9842 0.9802 0.9802 0.9999 1.0000 0.9766 0.9842 0.9802 0.9802 0.9999 1.0000

11/1/2014 0.9478 0.9745 0.9703 0.9703 0.9998 1.0000 0.9478 0.9745 0.9703 0.9703 0.9998 1.0000

12/1/2014 0.8824 0.9505 0.9485 0.9485 0.9997 1.0000 0.8824 0.9505 0.9485 0.9485 0.9997 1.0000

C. Out-of-System Liability Factor (Mulitplicative)


Other


Other

Professional Rx Other ClaimsCY 2014 1.0005 1.0005 1.0398 1.0398 1.0000 1.0000 1.0005 1.0005 1.0398 1.0398 1.0000 1.0000

D. Total CY 2014 Claims Liability [(A/B)*C]

Paid Allowed


Other


Other

Professional Rx Other Claims1/1/2014 $2,163,511 $1,529,906 $346,383 $1,357,330 $1,069,427 $0 $2,423,160 $2,329,919 $492,736 $2,556,764 $1,485,991 $0

2/1/2014 $2,940,118 $1,872,827 $358,848 $1,565,287 $1,246,334 $0 $3,098,375 $2,526,157 $499,135 $2,610,740 $1,633,511 $0

3/1/2014 $2,622,443 $2,449,691 $468,613 $2,122,107 $1,715,464 $0 $2,831,644 $3,144,306 $633,526 $3,318,410 $2,110,061 $0

4/1/2014 $2,986,687 $2,992,170 $543,998 $2,584,265 $1,900,887 $0 $3,157,640 $3,761,430 $727,993 $3,828,267 $2,329,560 $0

5/1/2014 $3,010,930 $3,045,376 $576,126 $2,770,506 $2,200,886 $0 $3,162,267 $3,873,438 $766,188 $4,043,224 $2,669,964 $0

6/1/2014 $3,239,122 $3,358,600 $592,238 $2,817,821 $2,318,612 $0 $3,396,800 $4,164,126 $760,380 $3,996,462 $2,732,775 $0

7/1/2014 $3,607,118 $3,536,885 $589,420 $3,001,318 $2,461,024 $0 $3,769,416 $4,224,498 $748,843 $4,106,934 $2,876,514 $0

8/1/2014 $3,225,055 $3,554,533 $566,690 $2,914,122 $2,528,871 $0 $3,361,337 $4,150,888 $709,921 $3,902,992 $2,915,970 $0

9/1/2014 $3,711,837 $3,669,313 $628,006 $3,202,122 $2,533,563 $0 $3,887,025 $4,271,081 $778,585 $4,221,139 $2,908,084 $0

10/1/2014 $3,429,615 $4,168,212 $662,037 $3,594,121 $2,531,708 $0 $3,565,774 $4,767,741 $818,010 $4,686,014 $2,954,279 $0

11/1/2014 $2,694,261 $3,434,910 $574,449 $3,068,638 $2,369,666 $0 $2,842,879 $3,942,776 $702,097 $3,973,092 $2,751,277 $0

12/1/2014 $3,965,122 $3,706,782 $643,996 $3,446,493 $2,707,953 $0 $4,112,639 $4,299,657 $791,920 $4,350,927 $3,123,131 $0


Appendix A: Base Claims Development



Appendix B: Population Risk/Other Adjustment


Lag Factor Adjustment

CY 2014 Base

Period Member

Months

CY 2014 Base

Period PMPM

Adjusted Member

Months

PMPM

Adjusted for

Lag

Individual Market Members 400,238 $423.70 357,725 $430.95

DP + Retained HSRI 220,488 $431.06 220,488 $431.06

New Members 179,750 $414.67 137,237 $430.77

Impact of Lag Factor 1.0171

1.0171

Uncollected Premium Adjustment

Direct Pay Uncollected $803,388

HSRI Uncollected $571,458

Total Individual Market $147,165,212

Uncollected Premium Adjustment 1.0093


Appendix C: Age Normalization


Age ACA Age Factor Member Months

0 0.635 1,433

1 0.635 1,370 ACA Age Normalization Factor 1.6876

2 0.635 1,350

3 0.635 1,538 Over 3 children under 21 years old 781

4 0.635 1,393 All Other 399,457

5 0.635 1,672 Member Months 400,238

6 0.635 1,641 >3 child children under 21 adjustment 99.80%

7 0.635 1,834

8 0.635 2,082

9 0.635 2,008

10 0.635 2,276

11 0.635 2,183

12 0.635 2,235

13 0.635 2,117

14 0.635 2,278

15 0.635 2,672

16 0.635 2,581

17 0.635 2,401

18 0.635 2,577

19 0.635 4,959

20 0.635 5,509

21 1 5,552

22 1 5,350

23 1 4,767

24 1 4,628

25 1.004 4,415

26 1.024 8,254

27 1.048 8,018

28 1.087 7,154

29 1.119 6,454

30 1.135 5,981

31 1.159 6,097

32 1.183 6,564

33 1.198 5,879

34 1.214 5,671

35 1.222 5,710

36 1.23 5,825

37 1.238 5,471

38 1.246 5,163

39 1.262 5,422

40 1.278 5,560

41 1.302 5,733

42 1.325 6,461

43 1.357 7,127

44 1.397 7,262

45 1.444 7,523

46 1.5 7,674

47 1.563 7,991

48 1.635 8,599

49 1.706 9,364

50 1.786 9,274

51 1.865 9,718

52 1.952 9,478

53 2.04 9,397

54 2.135 9,723

55 2.23 10,680

56 2.333 11,311

57 2.437 11,127

58 2.548 10,804

59 2.603 11,313

60 2.714 11,326

61 2.81 11,138

62 2.873 12,460

63 2.952 13,397

64 3 12,432

65 3 726

66 3 262

67 3 346

68 3 136

69 3 141

70 3 128

71 3 161

72 3 142

73 3 92

74 3 64

75 3 81

76 3 74

77 3 30

78 3 58

79 3 1

80 3 45

81 3 45

82 3 29

83 3 28

84 3 39

85 3 35

86 3 42

87 3 33

88 3 45

89 3 22

90 3 19

91 3 11

92 3 20

93 3 11

98 3 3

99 3 3

100 3 10


Appendix D: Calculation of Paid to Allowed Average Factor and 70% Utilization Factor in Projection Period

1. Allowed Claims PMPM 470.35$

2. State-Mandated Assessments 7.75$

3. 2016 Projected Allowed PMPM 478.10$

4. 2014 Actual Net to Allowed 0.7489

5. 2-Year Paid Leveraging Factor 1.0167

6. 2016 Expected Net to Allowed 0.7614

7. 2016 Expected Paid under current benefit design $358.11

8. Average 2014 Benefit Factor Relative to 70% Silver 0.7051

9. Average 2016 EHB Benefit Factor Relative to 70% Silver 0.6558

10. Benefit Adjustment 0.9300

11. 2016 Expected Paid under EHB Benefit Design $340.79

12. 2016 Paid-to-Allowed Factor (line 12 divided by line 3) 0.7128

13. 70% Silver Plan Utilization Adjustment 0.0870

2016 EHB Benefit Factor

Projected Relative to

Exchange Metallic Member 70% Silver

Offering Level Plan Name Distribution Plan

On/Off Gold VantageBlue Direct 1000/2000 WPD 3,077 0.8619

On/Off Gold VantageBlue Direct 1000/2000 WOPD 1,847 0.8599

On/Off Silver VantageBlue Direct 3000/6000 WPD 3,881 0.7210

On/Off Silver VantageBlue Direct 3000/6000 WOPD 1,194 0.7189

Off Gold VantageBlue Direct Embedded Dental 1200/2400 1,000 0.8432

On/Off Gold BlueSolutions for HSA Direct 1400/2800 WPD 2,403 0.7910

On/Off Gold BlueSolutions for HSA Direct 1400/2800 WOPD 300 0.7890

On/Off Bronze BlueSolutions for HSA Direct 3700/7400 WPD 254 0.5164

On/Off Bronze BlueSolutions for HSA Direct 3700/7400 WOPD 153 0.5144

On/Off Silver BlueSolutions for HSA Direct 3900/7800 WPD 4,846 0.5853

On/Off Silver BlueSolutions for HSA Direct 3900/7800 WOPD 123 0.5833

On/Off Bronze BlueSolutions for HSA Direct 5350/10700 WPD 5,944 0.5020

On/Off Bronze BlueSolutions for HSA Direct 5350/10700 WOPD 1,054 0.5000

On/Off Gold BasicBlue Direct WPD 2750/5500 2,403 0.7553

On/Off Gold BasicBlue Direct WOPD 2750/5500 300 0.7533

On/Off Silver BasicBlue Direct WPD 4900/9800 2,403 0.5989

On/Off Silver BasicBlue Direct WOPD 4900/9800 801 0.5969

On/Off Bronze BasicBlue Direct WPD 6850/13700 1,202 0.4996

On/Off Bronze BasicBlue Direct WOPD 6850/13700 150 0.4975

On/Off Silver BlueCHiP Advance Direct 2000/4000 WPD 4,846 0.5995

On/Off Silver BlueCHiP Advance Direct 2000/4000 WOPD 123 0.5975

On/Off Bronze BasicBlue Direct WPD 6850/13700 0 0.4996


On/Off Gold VantageBlue Direct 1000/2000 WPD 0 0.8619

On/Off Gold VantageBlue Direct 1000/2000 WOPD 0 0.8599

On/Off Silver VantageBlue Direct 3000/6000 WPD 0 0.7210

On/Off Silver VantageBlue Direct 3000/6000 WOPD 0 0.7189

On/Off Bronze 0 0.4996


On/Off Catastrophic BasicBlue Direct WPD 6850/13700 0 0.4996

On/Off Catastrophic BasicBlue Direct WOPD 6850/13700 0 0.4975

Total 38,304 0.6558


Projected Claims PMPM

Projected Allowed Claims $478.04

Mandated Benefits $0.11

Abortion Claims -$0.04

Allowed Adjustment $0.07

Total Allowed Claims $478.10

Paid to Allowed Factor 0.7128

Paid Claims Before Risk Adjustment/Reinsurance $340.79

Reinsurance Recovery -$15.00

Risk Adjuster $0.15

Paid Claims $325.93

Projected Retention PMPM % Premium

Admin $46.59 10.94% PMPM

Reinsurance Fee $2.25 0.53% PMPM

PCORI $0.18 0.04% PMPM

Premium Tax $8.52 2.00% %

Health Insurer Tax $9.54 2.24% %

Investment Income $0.00 0.00% %

Contribution to Reserves $12.78 3.00% %

Exchange User Fee $20.19 4.74% %

Other Taxes $0.00 0.00% %

Total After Claims $100.05 23.49%

EHB Projected Premium $425.98 100.00%


Appendix E: Calculation of Expected Medical Premium



Appendix F: Reinsurance Calculation


Case 2016 2016 Min

# Claims Reinsurance 90,000$

1 $577,594.81 $80,000.00 Max

2 $535,035.88 $80,000.00 250,000$

3 $519,626.85 $80,000.00 Cost Share Rate

4 $494,400.28 $80,000.00 50%

5 $487,070.34 $80,000.00

6 $471,728.25 $80,000.00

7 $450,030.64 $80,000.00

8 $412,821.99 $80,000.00

9 $389,484.76 $80,000.00

10 $377,268.90 $80,000.00

11 $355,613.80 $80,000.00

12 $337,966.89 $80,000.00

13 $337,090.23 $80,000.00

14 $336,036.11 $80,000.00

15 $324,111.41 $80,000.00

16 $319,598.47 $80,000.00

17 $317,681.50 $80,000.00

18 $316,839.91 $80,000.00

19 $293,793.84 $80,000.00

20 $288,208.72 $80,000.00

21 $283,732.97 $80,000.00

22 $283,284.54 $80,000.00

23 $280,760.82 $80,000.00

24 $271,644.62 $80,000.00

25 $264,755.66 $80,000.00

26 $259,615.78 $80,000.00

27 $259,515.89 $80,000.00

28 $251,074.45 $80,000.00

29 $246,618.89 $78,309.44

30 $241,827.54 $75,913.77

31 $237,919.23 $73,959.62

32 $228,433.23 $69,216.62

33 $225,902.08 $67,951.04

34 $222,893.80 $66,446.90

35 $220,070.43 $65,035.21

36 $218,521.13 $64,260.56

37 $215,698.81 $62,849.41

38 $214,897.60 $62,448.80

39 $206,174.56 $58,087.28

40 $205,111.95 $57,555.97

41 $203,836.80 $56,918.40

42 $198,942.38 $54,471.19

43 $197,842.57 $53,921.29

44 $195,179.65 $52,589.82

45 $190,293.73 $50,146.86

46 $187,553.24 $48,776.62

47 $187,233.39 $48,616.69

48 $187,017.68 $48,508.84

49 $186,873.16 $48,436.58

50 $185,967.81 $47,983.90

51 $184,400.45 $47,200.22

52 $183,453.65 $46,726.83

53 $177,047.13 $43,523.56

54 $176,101.40 $43,050.70

55 $175,860.18 $42,930.09

56 $174,706.18 $42,353.09

57 $174,228.00 $42,114.00

58 $174,076.05 $42,038.02

59 $171,695.78 $40,847.89

60 $171,626.71 $40,813.35

61 $171,187.85 $40,593.92

62 $170,984.89 $40,492.44

63 $170,105.04 $40,052.52

64 $169,071.11 $39,535.56

65 $168,206.14 $39,103.07

66 $165,634.60 $37,817.30

67 $165,281.81 $37,640.91

68 $164,482.73 $37,241.36

69 $163,798.40 $36,899.20

70 $163,582.69 $36,791.34

71 $161,331.00 $35,665.50

72 $161,111.04 $35,555.52

73 $160,727.43 $35,363.72

74 $160,536.16 $35,268.08

75 $159,997.41 $34,998.71

76 $159,640.37 $34,820.19

77 $154,738.51 $32,369.26

78 $154,199.77 $32,099.88

79 $150,915.21 $30,457.61

80 $147,788.99 $28,894.49

81 $146,104.74 $28,052.37

82 $144,064.51 $27,032.25

83 $143,954.00 $26,977.00

84 $142,750.05 $26,375.03

85 $142,084.85 $26,042.43

86 $142,060.41 $26,030.21

87 $141,791.57 $25,895.78

88 $138,873.62 $24,436.81

89 $138,214.79 $24,107.40

90 $134,962.12 $22,481.06

91 $133,909.06 $21,954.53

92 $133,810.24 $21,905.12

93 $133,700.79 $21,850.40

94 $133,245.99 $21,623.00

95 $132,795.44 $21,397.72

96 $131,897.53 $20,948.76

97 $131,850.77 $20,925.39

98 $129,499.20 $19,749.60

99 $127,874.45 $18,937.23

100 $127,156.12 $18,578.06

101 $126,718.32 $18,359.16

102 $126,354.91 $18,177.45

103 $125,859.73 $17,929.86

104 $125,281.66 $17,640.83

105 $123,567.66 $16,783.83

106 $123,529.41 $16,764.70

107 $122,530.54 $16,265.27

108 $122,435.97 $16,217.99

109 $122,359.46 $16,179.73

110 $121,284.09 $15,642.05

111 $121,224.59 $15,612.29

112 $121,087.51 $15,543.75

113 $120,720.91 $15,360.45

114 $119,896.31 $14,948.16

115 $119,896.31 $14,948.16

116 $119,680.60 $14,840.30

117 $119,582.84 $14,791.42

118 $119,152.48 $14,576.24

119 $119,146.10 $14,573.05

120 $118,613.73 $14,306.87

121 $118,360.83 $14,180.41

122 $117,754.07 $13,877.04

123 $117,500.11 $13,750.05

124 $117,479.92 $13,739.96

125 $117,364.09 $13,682.05

126 $117,170.70 $13,585.35

127 $116,829.60 $13,414.80

128 $116,472.56 $13,236.28

129 $116,189.90 $13,094.95

130 $114,845.69 $12,422.84

131 $114,646.98 $12,323.49

132 $113,916.96 $11,958.48

133 $113,540.79 $11,770.40

134 $113,065.80 $11,532.90

135 $112,609.94 $11,304.97

136 $112,112.63 $11,056.32

137 $111,188.86 $10,594.43

138 $110,885.31 $10,442.65

139 $110,632.40 $10,316.20

140 $110,041.59 $10,020.79

141 $110,032.03 $10,016.01

142 $109,385.95 $9,692.98

143 $108,592.18 $9,296.09

144 $108,501.85 $9,250.93

145 $107,708.08 $8,854.04

146 $107,591.19 $8,795.60

147 $107,521.06 $8,760.53

148 $107,317.04 $8,658.52

149 $106,468.00 $8,234.00

150 $105,324.63 $7,662.31

151 $104,785.88 $7,392.94

152 $104,700.87 $7,350.43

153 $104,531.91 $7,265.96

154 $103,589.37 $6,794.68

155 $103,525.61 $6,762.81

156 $103,050.62 $6,525.31

157 $102,213.28 $6,106.64

158 $101,893.43 $5,946.72

159 $101,823.30 $5,911.65

160 $100,797.87 $5,398.94

161 $100,142.23 $5,071.12

162 $100,097.60 $5,048.80

163 $99,707.62 $4,853.81

164 $99,567.36 $4,783.68

165 $99,549.29 $4,774.65

166 $99,430.28 $4,715.14

167 $99,126.37 $4,563.19

168 $99,039.24 $4,519.62

169 $99,038.17 $4,519.09

170 $98,737.45 $4,368.73

171 $98,633.32 $4,316.66

172 $98,422.92 $4,211.46

173 $97,982.99 $3,991.50

174 $97,603.64 $3,801.82

175 $97,602.58 $3,801.29

176 $96,786.49 $3,393.24

177 $96,519.77 $3,259.88

178 $96,085.16 $3,042.58

179 $95,970.39 $2,985.20

180 $95,804.63 $2,902.31

181 $95,732.37 $2,866.18

182 $95,637.79 $2,818.90

183 $94,688.88 $2,344.44

184 $94,599.62 $2,299.81

185 $94,337.15 $2,168.57

186 $94,023.68 $2,011.84

187 $93,196.96 $1,598.48

188 $93,068.38 $1,534.19

189 $92,985.50 $1,492.75

190 $92,890.93 $1,445.46

191 $92,585.95 $1,292.98

192 $92,483.94 $1,241.97

193 $92,320.30 $1,160.15

194 $91,997.26 $998.63

195 $91,911.19 $955.60

196 $91,878.25 $939.13

197 $91,756.05 $878.02

198 $91,570.09 $785.05

199 $91,497.83 $748.92

200 $91,218.36 $609.18

201 $90,869.83 $434.91

202 $90,352.33 $176.16

203 $90,322.58 $161.29

204 $90,213.13 $106.56

*** 2-yr price trend applied to 2014 reinsurance data

Reinsurance Member Months 2016 PMPM

2014 Estimate using 2016 Parameters $6,005,399 400,238 $15.00

A1 Incurred and Paid

Calendar Year Experience

Paid Through

Date

Inpatient

Days/1000 Total

Inpatient

Hospital Outpatient Hospital Primary Care Other Med/Surg

Prescription

Drugs Capitation

Claims not

Otherwise

categorized

(explain)

CY 2012 2/28/2013 415.36 62,978,626$ 18,532,020$ 13,076,202$ 2,691,483$ 12,973,107$ 14,357,746$ -$ 1,348,068$

CY 2013 2/28/2014 331.79 64,273,146$ 17,518,564$ 15,358,394$ 2,939,433$ 12,909,625$ 13,741,037$ -$ 1,806,093$

CY 2014 2/28/2015 322.04 139,532,456$ 36,833,885$ 36,840,562$ 6,215,203$ 30,756,118$ 25,582,600$ -$ 3,304,089$

A2 Completed and Incurred

Calendar Year Experience Member Months Earned Premium Total

Inpatient


Prescription

Drugs Capitation

Claims not

Otherwise

categorized

(explain) Loss Ratio

Investment

Income Credit

Contribution to

Reserves

CY 2012 187,247 68,167,816$ 64,453,295$ 19,263,832$ 13,065,431$ 3,310,563$ 13,094,672$ 14,370,729$ -$ 1,348,068$ 94.5% -$ (8,374,795)$

CY 2013 200,621 69,326,768$ 66,141,976$ 18,200,970$ 15,627,056$ 3,692,982$ 13,055,071$ 13,759,804$ -$ 1,806,093$ 95.4% (228,000)$ (8,010,265)$

CY 2014 400,238 147,165,212$ 142,798,441$ 37,595,820$ 37,319,206$ 6,550,805$ 32,444,129$ 25,584,392$ -$ 3,304,089$ 97.0% (7,000)$ 11,280,000$

A3 Allowed

Calendar Year Experience Total

Inpatient


Prescription

Drugs Capitation

Claims not

Otherwise

categorized

CY 2012 84,314,762$ 20,942,770$ 17,818,988$ 4,321,121$ 21,579,256$ 18,304,559$ -$ 1,348,068$

CY 2013 86,756,970$ 20,022,679$ 20,966,371$ 4,697,112$ 22,001,194$ 17,263,521$ -$ 1,806,093$

CY 2014 172,884,477$ 39,608,956$ 45,456,017$ 8,429,335$ 45,594,964$ 30,491,115$ -$ 3,304,089$

B Average Rate Increase ComponentsShould reconcile with rate increase for 21 year old EHB rate, 0% cost sharing, silver utilization Calculation of Weights

Claims Category Part I

Assumed

Weight Cost Utilization,Other Total Claims Category

Index Rate

PMPM % Distribution

Inpatient Hospital 18.0% 0.6% 0.0% 0.6% Inpatient Hospital $107.58 18.0%

Outpatient Hospital 21.4% 0.6% 0.5% 1.1% Outpatient Hospital $127.68 21.4%

Primary Care 4.0% 0.2% 0.0% 0.2% Primary Care $23.81 4.0%

Other Medical/Surgical 20.0% 0.3% 0.0% 0.3% Other Medical/Surgical $119.82 20.0%

Prescription Drug 15.3% 0.0% 1.5% 1.5% Prescription Drug $91.48 15.3%

Capitation 0.0% 0.0% 0.0% 0.0% Capitation $0.00 0.0%

Other Not Categorized 1.3% 0.0% 0.0% 0.0% Other Not Categorized $7.75 1.3%

Total Projected Claims 80.0% 3.7% Total Projected Claims $478.11 80.0%

Adjustments & Retention Part II

Assumed

Weight

CY 2015

Adjustment

CY 2016

Adjustment Total Adjustments & Retention Part II PMPM % Distribution

Population Risk Adjustment 80.0% 0.0% 0.0% 0.00%

Other Adjustment 80.0% 0.2% 0.0% -0.1%

Risk Adjustment 0.0% 0.0% 0.0% Risk Adjustment $0.20 0.0%

Reinsurance -9.3% -3.0% 6.9% Reinsurance -$17.89 -3.0%

Exchange User Fee 0.0% 4.7% 4.7% Exchange User Fee $28.33 4.7%

Admin Expense Load 10.6% 10.9% 0.3% Administrative Expense Load $65.36 10.9%

ACA Taxes & Fees 2.3% 2.3% 0.0% ACA Fees and Taxes $13.64 2.3%

Premium Tax 2.0% 2.0% 0.0% Premium Tax $11.95 2.0%

Other Retention Charge 0.5% 0.0% -0.5% Other Retention Charge $0.00 0.0%

Contribution to Reserve 3.0% 3.0% 0.0% Contribution to Reserve $17.93 3.0%

Investment Income Credit 0.0% 0.0% 0.0% Investment Income Credit $0.00 0.0%

Prior Period Adjustment (+/-) 1.8% Retention $108.88 18.2%

Total 17.9% Total Theoretical Rate $597.63

1/1/2016 EHB 21 year old rate increase 17.9%

C Enrollment Statistics

Age Category 31-Dec-13 31-Dec-14 31-Mar-15

<18 2,454 3,082 2,837

18-24 1,557 2,858 2,035

25-29 1,396 2,951 2,085

30-34 1,016 2,738 1,821

35-39 776 2,605 1,611

40-44 957 2,948 1,836

45-49 1,367 3,675 2,420

50-54 1,719 4,323 3,052

55-59 2,643 5,959 4,345

Membership Enrollment

Rate Template Part I

Data and Explanation of Rate Increase

Rate Template Part II

Rate Development

Company Legal Name: Blue Cross & Blue Shield of RI State: RI

HIOS Issuer ID: Market: Individual

Effective Date: 1/1/2016


Section I: Index Rate for Projection PeriodExperience Period Projection Period: 1/1/2016 to 12/31/2016 Mid-point to Mid-point, Experience to Projection: 24 months

on Actual Experience Allowed

Adj't. from Experience to


Benefit Category Utilization Description

Utilization per

1,000

Average

Cost/Service PMPM

Pop'l risk

Morbidity Other Cost Util & Other

Utilization per

1,000

Average

Cost/Service PMPM

Utilization

per 1,000

Average

Cost/Service PMPMInpatient Hospital admit/days 327.61 3,624.95$ 98.96$ 1.017 1.000 1.034 1.000 333.21 3,873.62 107.56$ -$

Outpatient Hospital services 2,116.51 643.92$ 113.57$ 1.017 1.000 1.028 1.023 2,252.89 679.96 127.66 -

Primary Care services 1,515.03 166.81$ 21.06$ 1.017 1.000 1.054 1.000 1,540.96 185.36 23.80 -

Other Medical/Surgical services 8,923.02 153.20$ 113.92$ 1.017 1.000 1.017 1.000 9,075.72 158.40 119.80 -

Prescription Drug scripts 13,710.08 66.68$ 76.18$ 1.017 0.985 1.000 1.095 16,720.05 65.65$ 91.47$ -

Capitation - 1.00 1.000 1.000 1.000 1.000 1.00 - - - - -

Other Not Categorized - 1.00 155.18$ 8.26$ 1.000 0.939 1.000 1.000 1.00 145.71 7.75 -

Total 431.95$ 478.04$ - -$

PMPM % Adjustment

(1) Projected Allowed Experience Claims PMPM (w/applied credibility if applicable) 100% 0% $478.04

(2) Adjustment to bring to Index Rate for Projection Period $0.07 0.0%

(3) Index Rate for the Projection Period $478.11

Section II: Market Adjusted Index Rate

(4) Risk Adjustment Impact $0.20 0.0%

(5) Reinsurance Impact -$17.89 -3.7%

(6) Exchange User Fees $28.33 5.9%

(7) Market Adjusted Index Rate $488.75 2.2%

Section III: Calculation of EHB Rate for 21 Year Old, 0% Cost Sharing, Silver Utilization Level

Section III A: Market Adjusted Index Rate Silver Utilization Level

(8) Experience Period Paid to Allowed Ratio 75%

(9) Paid to Allowed Ratio in Projection Period 71%

(10) Projected Federal Actuarial Value 70%

(11) Adjustment to Silver Level utilization 1.09

(12) Market Adjusted Index Rate Silver Utilization Level 531.25

Section III B: Retention Charge PMPM % Charge

(13) Administrative Expense Load $71.05 10.9%

(14) ACA Fees and Taxes $14.83 2.3%

(15) Premium Tax $12.99 2.0%

(16) Other Retention Charge $0.00 0.0%

(17) Contribution to Reserve $19.49 3.0%

(18) Investment Income Credit $0.00 0.0%

(19) Total Retention Charge $118.35 18.2%

(20) 1/1/2016 EHB Revenue Requirement for 0% cost sharing, silver utilization level (70%) $649.60

Section III C: Age Normalization/Calibration

(21) Age Normalization to 21 year old 1.6843

*** Uncollected Premium Adjustment 1.0093

(22) 1/1/2016 EHB Rate for 21 year old, 0% cost sharing, silver utilization level (70%) $389.27


(24) RATE INCREASE 17.9%


(26) 1/1/2016 Weighted Average Increase for All Plan Offerings 10.9%

Section IV: Annual Trend Assumption

Cost Utilization

Projected

PMPM

Inpatient Hospital 3.4% 0.0% $102.30

Outpatient Hospital 2.8% 2.3% $119.39

Primary Care 5.4% 0.0% $22.20

Other Medical/Surgical 1.7% 0.0% $115.83

Prescription Drug 0.0% 9.5% $83.42

Capitation 0.0% 0.0% $0.00

Other Not Categorized 0.0% 0.0% $8.26

$451.40

Annual Trend 4.5%


Rate Template Part III

Plan Rates

Carrier Name: Blue Cross & Blue Shield of Rhode Island

Plan Type(s): PPO

Market Segment: Individual

Rate Effective Date: 1/1/2016

Market Adjusted Index Rate $488.75

HIOS Plan ID (Standard

Component)

Plan Type (HMO, POS,

PPO, Indemnity, Other) 1/1/15 Carrier Plan Code or Name

Discontinued, New,

Modified, Existing (D,

N,M, E) for 2016 1/1/16 Carrier Plan Code or Name

Metallic

Tier

Metallic Tier

Actuarial

Value

Standard AV,

Approach (1),

Approach (2)

Exchange

On/Off or

Off

Pedi-Dental Y

or N

Abortion

Benefit Y or N

Totals 0.7040

Plan 1A 15287RI0270003 PPO VantageBlue Direct 1000/2000 WPD M VantageBlue Direct 1000/2000 WPD Gold 0.8020 Approach (1) On/Off Y Y

Plan 1B 15287RI0360001 PPO VantageBlue Direct 1000/2000 WOPD M VantageBlue Direct 1000/2000 WOPD Gold 0.8020 Approach (1) On/Off N Y

Plan 2A 15287RI0270004 PPO VantageBlue Direct 3000/6000 WPD M VantageBlue Direct 3000/6000 WPD Silver 0.7076 Approach (1) On/Off Y Y

Plan 2B 15287RI0360002 PPO VantageBlue Direct 3000/6000 WOPD M VantageBlue Direct 3000/6000 WOPD Silver 0.7076 Approach (1) On/Off N Y

Plan 3A 15287RI0720001 PPO N VantageBlue Direct Embedded Dental 1200/2400 Gold 0.7949 Approach (1) Off Y Y

Plan 4C 15287RI0020005 PPO BlueSolutions for HSA Direct 1500/3000 WPD M BlueSolutions for HSA Direct 1400/2800 WPD Gold 0.7803 Approach (1) On/Off Y N

Plan 4D 15287RI0350001 PPO BlueSolutions for HSA Direct 1500/3000 WOPD M BlueSolutions for HSA Direct 1400/2800 WOPD Gold 0.7803 Approach (1) On/Off N N

Plan 5A 15287RI0020007 PPO BlueSolutions for HSA Direct 2400/4800 WPD M BlueSolutions for HSA Direct 3700/7400 WPD Bronze 0.6196 Approach (1) On/Off Y Y

Plan 5B 15287RI0350004 PPO BlueSolutions for HSA Direct 2400/4800 WOPD M BlueSolutions for HSA Direct 3700/7400 WOPD Bronze 0.6196 Approach (1) On/Off N Y

Plan 6C 15287RI0020006 PPO BlueSolutions for HSA Direct 2600/5200 WPD M BlueSolutions for HSA Direct 3900/7800 WPD Silver 0.6807 Approach (1) On/Off Y N

Plan 6D 15287RI0350002 PPO BlueSolutions for HSA Direct 2600/5200 WOPD M BlueSolutions for HSA Direct 3900/7800 WOPD Silver 0.6807 Approach (1) On/Off N N

Plan 7C 15287RI0020008 PPO BlueSolutions for HSA Direct 5000/10000 WPD M BlueSolutions for HSA Direct 5350/10700 WPD Bronze 0.6189 Approach (1) On/Off Y N

Plan 7D 15287RI0350003 PPO BlueSolutions for HSA Direct 5000/10000 WOPD M BlueSolutions for HSA Direct 5350/10700 WOPD Bronze 0.6189 Approach (1) On/Off N N

Plan 8A 15287RI0700001 PPO N BasicBlue Direct WPD 2750/5500 Gold 0.7928 Approach (1) On/Off Y Y

Plan 8B 15287RI0710001 PPO N BasicBlue Direct WOPD 2750/5500 Gold 0.7928 Approach (1) On/Off N Y

Plan 9A 15287RI0700002 PPO N BasicBlue Direct WPD 4900/9800 Silver 0.6815 Approach (1) On/Off Y Y

Plan 9B 15287RI0710002 PPO N BasicBlue Direct WOPD 4900/9800 Silver 0.6815 Approach (1) On/Off N Y

Plan 10A 15287RI0700003 PPO N BasicBlue Direct WPD 6850/13700 Bronze 0.6194 Approach (1) On/Off Y Y

Plan 10B 15287RI0710003 PPO N BasicBlue Direct WOPD 6850/13700 Bronze 0.6194 Approach (1) On/Off N Y

Plan 11A 15287RI0730001 HMO N BlueCHiP Advance Direct 2000/4000 WPD Silver 0.6828 Approach (1) On/Off Y Y

Plan 11B 15287RI0740001 HMO N BlueCHiP Advance Direct 2000/4000 WOPD Silver 0.6828 Approach (1) On/Off N Y

Plan 10A 15287RI0700003 PPO VantageBlue Direct 5800/11600 WPD D BasicBlue Direct WPD 6850/13700 Bronze 0.6194 Approach (1) On/Off Y Y

Plan 10B 15287RI0710003 PPO VantageBlue Direct 5800/11600 WOPD D BasicBlue Direct WOPD 6850/13700 Bronze 0.6194 Approach (1) On/Off N Y

Plan 1A 15287RI0270003 PPO VantageBlue SelectRI Direct 500/1000 WPD D VantageBlue Direct 1000/2000 WPD Gold 0.8020 Approach (1) On/Off Y Y

Plan 1B 15287RI0360001 PPO VantageBlue SelectRI Direct 500/1000 WOPD D VantageBlue Direct 1000/2000 WOPD Gold 0.8020 Approach (1) On/Off N Y

Plan 2A 15287RI0270004 PPO VantageBlue Select RI Direct 3000/6000 WPD D VantageBlue Direct 3000/6000 WPD Silver 0.7076 Approach (1) On/Off Y Y

Plan 2B 15287RI0360002 PPO VantageBlue Select RI Direct 3000/6000 WOPD D VantageBlue Direct 3000/6000 WOPD Silver 0.7076 Approach (1) On/Off N Y

Plan 10A 15287RI0700003 PPO VantageBlue SelectRI Direct 5800/11600 WPD D Bronze 0.6194 Approach (1) On/Off Y Y

Plan 10B 15287RI0710003 PPO VantageBlue SelectRI Direct 5800/11600 WOPD D BasicBlue Direct WOPD 6850/13700 Bronze 0.6194 Approach (1) On/Off N Y

Plan 10A 15287RI0700003 PPO BasicBlue Direct WPD D BasicBlue Direct WPD 6850/13700 Catastrophic 0.6194 Approach (1) On/Off Y Y

Plan 10B 15287RI0710003 PPO BasicBlue Direct WOPD D BasicBlue Direct WOPD 6850/13700 Catastrophic 0.6194 Approach (1) On/Off N Y

Plan 18A

Plan 18B

Plan 17B

Plan 17C

Provider

Network

Utilization

Management

Benefits in

addition to

EHB

AV and Cost

Sharing

Distribution

and Admin

Costs less

Exchange Fees

Cat Plan

Adjustment

Proposed

1/1/16 Plan

Adjustment

Other

Adjustments

(Calibration, 3

child cap etc.)

Total Number of

Members/Enrolled

Policyholders +

Covered

Dependents

Total Number of

Subscribers/Enrolled

Policyholders

1/1/16 Number of

Members/Enrolled

Policyholders +

Covered Dependents

1/1/16 Number of

Subscribers/Enrolled

Policyholders

1/1/15

Normalized Plan

Adjusted Rate

PMPM

1/1/16 Normalized

Plan Adjusted Rate

1.0000 1.0232 1.0017 0.6965 1.2228 1.0000 0.8799 1.0020 38,304 25,674 38,304 25,674 $392.94 $435.72

1.00 1.1685 1.00008 0.8077 1.22 1.00 1.15 1.00 3,077 1,857 2 3,077 1,857 495.35 $565.18

1.00 1.1685 1.00008 0.8058 1.22 1.00 1.15 1.00 1,847 1,151 2 1,847 1,151 492.96 $563.84

1.00 1.0951 1.00008 0.7209 1.22 1.00 0.97 1.00 3,881 2,492 2 3,881 2,492 417.28 $472.76

1.00 1.0951 1.00008 0.7188 1.22 1.00 0.96 1.00 1,194 788 2 1,194 788 414.89 $471.42

1.00 1.1596 1.06212 0.7962 1.22 1.00 1.20 1.00 1,000 670 1 1,000 670 $587.23

1.00 1.0778 1.00000 0.8037 1.22 1.00 1.06 1.00 2,403 1,443 1 2,403 1,443 460.96 $518.67

1.00 1.0778 1.00000 0.8016 1.22 1.00 1.06 1.00 300 233 1 300 233 458.57 $517.32

1.00 0.9151 1.00008 0.6180 1.22 1.00 0.69 1.00 254 246 1 254 246 321.31 $338.63

1.00 0.9151 1.00008 0.6155 1.22 1.00 0.69 1.00 153 146 1 153 146 318.92 $337.29

1.00 0.9524 1.00000 0.6729 1.22 1.00 0.78 1.00 4,846 3,672 1 4,846 3,672 376.33 $383.78

1.00 0.9524 1.00000 0.6706 1.22 1.00 0.78 1.00 123 87 1 123 87 373.94 $382.43

1.00 0.9052 1.00000 0.6073 1.22 1.00 0.67 1.00 5,944 3,972 1 5,944 3,972 294.52 $329.15

1.00 0.9052 1.00000 0.6048 1.22 1.00 0.67 1.00 1,054 720 1 1,054 720 292.13 $327.81

1.00 1.0420 1.00008 0.7937 1.22 1.00 1.01 1.00 2,403 1,443 1 2,403 1,443 $495.29

1.00 1.0420 1.00008 0.7916 1.22 1.00 1.01 1.00 300 233 1 300 233 $493.95

1.00 0.9566 1.00008 0.6856 1.22 1.00 0.80 1.00 2,403 1,443 1 2,403 1,443 $392.74

1.00 0.9566 1.00008 0.6832 1.22 1.00 0.80 1.00 801 481 1 801 481 $391.40

1.00 0.8874 1.00008 0.6164 1.22 1.00 0.67 1.00 1,202 722 4 1,202 722 $327.57

1.00 0.8874 1.00008 0.6139 1.22 1.00 0.67 1.00 150 116 4 150 116 $326.23

1.00 1.0638 1.00008 0.6171 1.22 1.00 0.80 1.00 4,846 3,672 1 4,846 3,672 $393.09

1.00 1.0638 1.00008 0.6151 1.22 1.00 0.80 1.00 123 87 1 123 87 $391.83

1.00 0.8874 1.00008 0.6164 1.22 1.00 0.67 1.00 - 4 - 298.98 $327.57

1.00 0.8874 1.00008 0.6139 1.22 1.00 0.67 1.00 - 4 - 296.59 $326.23

1.00 1.1685 1.00008 0.8077 1.22 1.00 1.15 1.00 - 2 - 504.06 $565.18

1.00 1.1685 1.00008 0.8058 1.22 1.00 1.15 1.00 - 2 - 501.67 $563.84

1.00 1.0951 1.00008 0.7209 1.22 1.00 0.97 1.00 - 2 - 423.40 $472.76

1.00 1.0951 1.00008 0.7188 1.22 1.00 0.96 1.00 - 2 - 421.01 $471.42

1.00 0.8874 1.00008 0.6164 1.22 1.00 0.67 1.00 - 4 - 376.33 $327.57

1.00 0.8874 1.00008 0.6139 1.22 1.00 0.67 1.00 - 4 - 373.94 $326.23

1.00 0.8874 1.00008 0.6164 1.22 1.00 0.67 1.00 - 4 - 262.71 $327.57

1.00 0.8874 1.00008 0.6139 1.22 1.00 0.67 1.00 - 4 - 260.32 $326.23

0

45 CFR Part 156.8 (d) (2) Allowable Factors

Proposed Rate

Change

Compared to

Prior 12

months

% of Total

Members/Enrolle

d Policyholders +

Covered

Dependents

% of 1/1/16

Members/Enr

olled

Policyholders +

Covered

Dependents

10.9% 100.0% 100.0%

14.1% 8.0% 8.0%

14.4% 4.8% 4.8%

13.3% 10.1% 10.1%

13.6% 3.1% 3.1%

2.6% 2.6%

12.5% 6.3% 6.3%

12.8% 0.8% 0.8%

5.4% 0.7% 0.7%

5.8% 0.4% 0.4%

2.0% 12.7% 12.7%

2.3% 0.3% 0.3%

11.8% 15.5% 15.5%

12.2% 2.8% 2.8%

6.3% 6.3%

0.8% 0.8%

6.3% 6.3%

2.1% 2.1%

3.1% 3.1%

0.4% 0.4%

12.7% 12.7%

0.3% 0.3%

9.6% 0.0% 0.0%

10.0% 0.0% 0.0%

12.1% 0.0% 0.0%

12.4% 0.0% 0.0%

11.7% 0.0% 0.0%

12.0% 0.0% 0.0%

-13.0% 0.0% 0.0%

-12.8% 0.0% 0.0%

24.7% 0.0% 0.0%

25.3% 0.0% 0.0%

Rate Template Part IV

Administrative Charges

Section I. EHB 0% cost sharing, silver utilization level (70%)

PMPM Percentage PMPM Percentage

(1) Retention Charge $118.35 18.2% $99.51 17.9%

(2) ACA Fees and Taxes $14.83 2.3% $14.07 2.5%

(3) Premium Tax $12.99 2.0% $11.10 2.0%

(4) Other Retention Charge $0.00 0.0% $2.78 0.5%

(5) Contribution to Reserve $19.49 3.0% $12.99 2.3%

(6) Investment Income Credit $0.00 0.0% $0.00 0.0%

(7) Administrative Expense Load $71.05 11% $58.57 11%

7a. Payroll and benefits $28.49 4.4% $26.85 4.8%

7b. Outsourced Services (EDP, claims etc.) $13.83 2.1% $9.27 1.7%

7c. Auditing and consulting $7.90 1.2% $9.53 1.7%

7d. Commissions $5.23 0.8% $0.00 0.0%

7e. Marketing and Advertising $1.71 0.3% $1.53 0.3%

7f. Legal Expenses $1.16 0.2% $1.74 0.3%

7g. Taxes, Licenses and Fees not included in (2) and (3) $0.00 0.0% $0.00 0.0%

7h. Reimbursements by Uninsured Plans $0.00 0.0% $0.00 0.0%

7i. Other Admin Expenses $12.73 2.0% $9.66 1.7%

$71.05 10.9% $58.57 10.6%

Section II. Market SegmentPMPM Percentage PMPM Percentage PMPM Percentage

(1) Retention Charge $77.97 18.2% $103.07 20.9% $90.96 18.5%

(2) ACA Fees and Taxes $9.83 2.3% $11.21 2.3% $13.44 2.7%

(3) Premium Tax $8.62 2.0% $9.84 2.0% $9.83 2.0%

(4) Other Retention Charge $0.00 0.0% $0.00 0.0% $0.00 0.0%

(5) Contribution to Reserve $12.93 3.0% $19.69 4.0% $19.66 4.0%

(6) Investment Income Credit $0.00 0.0% -$0.64 -0.1% -$0.84 -0.2%

(7) Administrative Expense Load $46.59 10.9% $62.97 12.8% $48.87 9.9%

7a. Payroll and benefits $18.68 4.4% $28.23 5.7% $26.76 5.4%

7b. Outsourced Services (EDP, claims etc.) $9.07 2.1% $13.54 2.8% $12.78 2.6%

7c. Auditing and consulting $5.18 1.2% $7.56 1.5% $7.17 1.5%

7d. Commissions $3.43 0.8% $9.76 2.0% $0.00 0.0%

7e. Marketing and Advertising $1.12 0.3% $0.95 0.2% $0.90 0.2%

7f. Legal Expenses $0.76 0.2% $0.96 0.2% $0.91 0.2%

7g. Taxes, Licenses and Fees not included in (2) and (3) $0.00 0.0% $0.00 0.0% $0.00 0.0%

7h. Reimbursements by Uninsured Plans $0.00 0.0% -$11.43 -2.3% -$14.97 -3.0%

7i. Other Admin Expenses $8.35 2.0% $13.40 2.7% $15.32 3.1%

Individual Market 1/1/16 Individual Market 1/1/15

Individual Market 1/1/16 Small Group Market 1/1/16 Large Group Market 1/1/16

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

3839

40

41

42

43

44

45

46

47

48

49

50

A B C D E F G H I J K L M N O P Q R S T U V W X Y

Unified Rate Review v2.0.4

Company Legal Name: Blue Cross & Blue Shield of RI State: RIHIOS Issuer ID: 15287 Market: Individual

Effective Date of Rate Change(s): 1/1/2016

Market Level Calculations (Same for all Plans)

Section I: Experience period data


Experience Period

Aggregate Amount PMPM % of Prem

Premiums (net of MLR Rebate) in Experience Period: $147,165,212 $367.69 100.00%

Incurred Claims in Experience Period $111,537,362 278.68 75.79%

Allowed Claims: $172,884,477 431.95 117.48%

Index Rate of Experience Period $432.00

Experience Period Member Months 400,238

Section II: Allowed Claims, PMPM basis

Experience Period Projection Period: 1/1/2016 to 12/31/2016 Mid-point to Mid-point, Experience to Projection: 24 months

on Actual Experience Allowed

Adj't. from Experience to


Benefit Category

Utilization

Description

Utilization per

1,000

Average

Cost/Service PMPM

Pop'l risk

Morbidity Other Cost Util

Utilization per

1,000

Average

Cost/Service PMPM

Utilization

per 1,000

Average

Cost/Service PMPM

Inpatient Hospital Admits 327.61 $3,624.95 $98.96 1.017 1.000 1.034 1.000 333.21 $3,873.62 $107.56 0.00 $0.00 $0.00

Outpatient Hospital Services 2,116.51 643.92 113.57 1.017 1.000 1.028 1.023 2,252.89 679.96 127.66 0.00 0.00 0.00

Professional Services 9,875.44 155.18 127.70 1.017 1.000 1.023 1.000 10,044.44 162.28 135.84 0.00 0.00 0.00

Other Medical Services 1,200.67 155.18 15.53 1.017 0.940 1.023 1.000 1,221.22 152.48 15.52 0.00 0.00 0.00

Capitation 0.00 0.00 0.00 1.000 1.000 1.000 1.000 0.00 0.00 0.00 0.00 0.00 0.00

Prescription Drug Prescriptions 13,710.08 66.68 76.18 1.017 0.985 1.000 1.095 16,720.05 65.65 91.47 0.00 0.00 0.00

Total $431.95 $478.04 $0.00

After Credibility Projected Period Totals

Section III: Projected Experience: Projected Allowed Experience Claims PMPM (w/applied credibility if applicable) 100.00% 0.00% $478.04 $219,730,130

Paid to Allowed Average Factor in Projection Period 0.713

Projected Incurred Claims, before ACA rein & Risk Adj't, PMPM $340.79 $156,643,808

Projected Risk Adjustments PMPM -0.15 (67,032)

Projected Incurred Claims, before reinsurance recoveries, net of rein prem, PMPM $340.94 $156,710,840

Projected ACA reinsurance recoveries, net of rein prem, PMPM 12.75 5,862,613

Projected Incurred Claims $328.18 $150,848,228

Administrative Expense Load 10.84% 46.59 21,415,097

Profit & Risk Load 3.90% 16.76 7,703,331

Taxes & Fees 8.94% 38.43 17,665,873

Single Risk Pool Gross Premium Avg. Rate, PMPM $429.96 $197,632,529

Index Rate for Projection Period $478.00

% increase over Experience Period 16.94%

% Increase, annualized: 8.14%

Projected Member Months 459,648

Information Not Releasable to the Public Unless Authorized by Law: This information has not been publically disclosed and may be privileged and confidential. It is for internal government use only and must not be

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Annualized Trend

Factors

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