Here's a fully-insured renewal story from a small company I'm networked with... Feel the pain, my friends....
Here’s What You Need to Know:
1. Premiums paid by company to BCBS: 323K
2. Claims paid out by BCBS to cover company claims: 181K
3.“Pooling Effect” Applied by BCBS: 139K
4. Administrative Costs Applied by BCBS: 56K
5. Sum of #2 through #4, BCBS Stated Cost Line: 376K
6. Result: BCBS gives company 1% rate increase
*** Note: BCBS uses past premiums paid, not resulting in claims cost, to decrease the % increase that would be called for (#5-#1).
That's right - this company had claims representing 60% of the total fully-insured premiums paid into the system for the year - a great year in claims experience by any measure. And took a 1% increase...