Louisville, KY. Jeff Eddinger, FCAS, MAAA. July 27, 2010

Transcription

1 NCSL Legislative i Summit 2010 Louisville, KY Jeff Eddinger, FCAS, MAAA Practice Leader & Senior Actuary July 27, 2010

2 Who is NCCI? National Council on Compensation Insurance (NCCI) is responsible for: Workers Compensation Rate Filings in 38 jurisdictions Legislative Analysis Research, Data Collection, Experience Rating, Residual Markets, etc. Industry Resource

3 mnity im Cost (000s) Workers Compensation Indemnity Claim Costs Average Indemnity Cost per Lost-Time Claim Annual Change : -1.7% Annual Change : +7.3% Annual Change : 2008: +4.0% +9.2% +10.1% 1% +10.1% +9.0% +7.7% +1.0% 10% 17% +5.9% -3.1% +4.9% +1.7% -2.8% $10. 1 $9.8 $9. 5 $10..0 $10. 2 $13.9 $12.6 $11.6 $10.8 $15.3 $ % +1.7% +3.1% $ 17.3 $1 8.0 $ % +5.0% +3.1% $ $19..8 $ % $22.0 $ Accident Year 009p: Preliminary based on data valued as of 12/31/ : Based on data through 12/31/2008, developed to ultimate ased on the states where NCCI provides ratemaking services, including state funds

4 demnity severity 2009p: Preliminary based on data valued as of 12/31/2009 demnity severity : Based on data through 12/31/2008, developed to ultimate ased on the states where NCCI provides ratemaking services, including state funds; excludes high deductible policies ource: Average Weekly Wage : Quarterly Census of Employment and Wages, Economy.com; 2009p, NCCI -1.0 ent Change WC Indemnity Severity vs. Wage Inflation Average Indemnity Cost per Lost-Time Claims Change in Indemnity Cost per Lost-Time Claim Change in Average Weekly Wage p Year

5 Workers Compensation Medical Claim Costs ical im Cost (000s) Average Medical Cost per Lost-Time Claim Annual Change : +1.9% Annual Change : +8.9% Annual Change : 2008: +6.6% 6% +10.6% +7.3% +10.1% +8.3% +7.4% +9.0% +5.1% +6.8% +1.3% -2.1% $8.4 $8.5 $8.4 $ 9.1 $9 9.6 $ $11.3 $12. 3 $13.6 $ % +8.8% +13.5% $16.5 $18.0 $ % $ % +5.4% +5.4% +7.4% $ 21.9 $ $ $25. 9 $ Accident Year 009p: Preliminary based on data valued as of 12/31/ : Based on data through 12/31/2008, developed to ultimate ased on the states where NCCI provides ratemaking services, including state funds

6 edical severity 2009p: Preliminary based on data valued as of 12/31/2009 edical severity : Based on data through 12/31/2008, developed to ultimate ased on the states where NCCI provides ratemaking services, including state funds; excludes high deductible policies ent Change WC Medical Severity vs. Medical CPI Average Medical Cost per Lost-Time Claims Change in Medical Cost per Lost-Time Claim 13.5 Change in Medical CPI Year

7 WC Medical Losses Are More Than Half of Total Losses All Claims NCCI States 2009p 1999 Indemnity 1989 Indemnity Indemnity 53% Medical Medical 52% 48% 47% Accident Year 2009p: Preliminary based on data valued as of 12/31/ , 1999: Based on data through 12/31/2008, developed to ultimate Based on the states where NCCI provides ratemaking services, including state funds Excludes high deductible policies Copyright 2010 NCCI Holdings, Inc. All Rights Reserved. 6 42% Medical 58%

8 Legislative Analysis Why is it so important? Legislators need to know the impact of proposed changes Rates are set for a future period In a typical year, NCCI prices 125 to 140 legislative proposals and enacted bills About 30% have a medical fee component

9 Medical Fee Schedules NCCI needs to know Which states have fee schedules and what types How effective the fee schedules are Details of the fee schedules NCCI prices the impact of new medical fee schedules NCCI prices the impact of changes in existing medical fee schedules NCCI incorporates the impacts into the state Rate Filings

10 Medical Fee Schedules Most states have them, but not all Trends More states are opting for schedules that are based on a percentage of Medicare More variety of fee schedules introduced: Hospital Outpatient Ambulatory Surgical Centers More measures are being introduced to control utilization

11 Data Ratemaking data Supplemental detailed medical data limited sample Purchased medical fee schedule data New Medical data to be collected starting in 2011 Almost 90% of available data More detailed Standardized format Link to other NCCI data

12 Closing Remarks While Ratemaking is our primary function, it is essential that NCCI remain a resource for Workers Compensation information Additional medical data will support both Legislative Analysis remains a core function and focus of NCCI

13 Thank You