Pre-Existing Condition Insurance Plan Washington State (PCIP-WA) January 2011 Financial Review

Transcription

1 Pre-Existing Condition Insurance Plan Washington State (PCIP-WA) January 2011 Financial Review 1. Financial Statements January 2011 UBalance Sheet Cash on Hand at the end of January 2011 is $30 K, which primarily consists of premium dollars received that have not been used to offset claims expense. The entire $30 K is fully secured by FDIC insurance. Cash position is discussed further in the Budgeted Cash Flow section below. The total IBNR of $1.3 M increased $464 K or 52.7% as compared to the prior month. Medical increased $466 K or 54.5%, while pharmacy decreased $2 K or 8.0% from December As of January 2011, the receivable for unbilled HHS reimbursements was $1.5 M. This amount represents an offset of liabilities, including IBNR, that will be invoiced and funded by HHS before the end of the program. UIncome Statement Total member months for January 2011 is 181. months are measured as the cumulative monthly member count (PMPM) over a period of time. The total incurred claim loss for January 2011 is $1.0 M. Incurred claim loss represents the total medical and pharmacy claims expense in addition to the change in unpaid losses (IBNR) and accrued loss adjustment for the period. For January 2011, the medical claims portion is $957 K and the pharmacy claims portion is $43 K. As of January 2011, Total Operating Expenses are $59 K and HHS Reimbursement is $949 K. 2. Budgeted Cash Flow January 2011 The Budgeted Cash Flow document contains the original budget (upper portion) as established in 2010 and the actual (lower portion) cash flow results year-to-date. The budget portion of the analysis is kept static all year so that our original thoughts are maintained. The Program Summary (discussed below) is a dynamic report and therefore changes as better financial information is obtained. The ending cash balance of $30 K is the remaining premium receipts not yet used to offset claims expense. Total net cash receipts for January 2011 are $175 K or 39.3% favorable to budget due to higher than anticipated reimbursements from HHS. Total expenses are $155 K or 34.8% unfavorable to budget. Total medical 03/01/2011 1

2 and pharmacy claims expenses combined are $183 K or 52.7% unfavorable to budget, but that is partially offset by $28 K of favorable administrative variances discussed further below. 3. Administrative Expense Budget January 2011 For January 2011, administrative expenses are $28 K or 28.5% favorable to budget (cash basis). 4. PCIP-WA Program Summary January 2011 The Program Summary is a blended cashflow forecast tool that tracks the federally allotted funds throughout the life of the program. Actual claims, premiums and administrative expense data is input as incurred, while data for future months is based on the original budget. The summary shows the projected remaining balance at the end of each year as well as at the end of the program. The summary also compares the original budget figures to the blended forecast figures and calculates the blended administrative cost percentage (yearly and in total). PCIP-WA submitted a revised forecast in November 2010 and those re-forecasted figures were updated in the November packet. Actual results are illustrated through February As of February 2011, membership is at 69.6% of projected. Actual Claims PMPM is $3,008 as compared to $1,754 Budgeted Claims PMPM. Projected drawdown of funds in 2011 is $305 K more than anticipated due to unfavorable claims expense and unfavorable premium receipts, which is partially offset by favorable administrative costs versus the budget. Administrative costs as a percent of total costs is projected to be 9.7% for 2011, and by the end of the program, that percentage is projected to be 5.6%. As of February 2011, projections indicated that PCIP-WA will use up 75% of the federally allotted funds by October /01/2011 2

3 PCIP-WA Unaudited Balance Sheet as of January 31 Total Enrollment : 181 Assets: 2011 Cash $ 30,281 Premiums Receivable 20,077 HHS Receivable - Unbilled HHS Reimbursement 1,517,053 Prepaid Expense 15,350 Total Assets $ 1,582,760 Liabilities and Unassigned Surplus: Reserve for Unpaid Losses - Medical $ 1,321,000 Reserve for Unpaid Losses - Pharmacy 23,000 Accrued Loss Adjustment 32,000 Premiums Received in Advance 176,251 Checks Written in Excess of Cash Balance (1) - Due to WSHIP - Accrued Expenses 30,510 Total Liabilities $ 1,582,760 Unassigned Surplus - Total Liabilities and Unassigned Surplus $ 1,582,760 (1) Checks Written in Excess of Cash Balance are claim checks written prior to the receipt of HHS reimbursements. These checks are not distributed until the proper funding is received. 03/01/2011 3

4 2011 Total 181 Premium Income Earned $ 109,883 Pharmacy Rebate Income - Incurred Claim Loss - Medical 956,958 Incurred Claim Loss - Pharmacy 42,887 Total Incurred Claim Loss 999,845 Operating Expenses: PCIP-WA Unaudited Statement of Operations January 1 to January 31 Administrative Expense $ 22,694 Variable Administrative Expense 10,993 Salary and Benefit Expense 7,120 Contracted Outreach Fees 4,883 Miscellaneous Expense 6,347 Professional Fee Expense 7,505 Start-Up Expenses - Total Operating Expenses $ 59,541 Underwriting Gain (Loss) $ (949,503) HHS Reimbursement 949,503 Investment Income - Other Income - Changes in Unassigned Surplus $ - 03/01/2011 4

5 PCIP-WA 2011 Budgeted Cash Flow Original Budget JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JAN YTD TOTAL Enrollment Count ,446 Cash Balance BEGINNING OF MONTH Receipts Premium Receipts 147, , , , , , , , , , , , ,866 4,369,078 HHS Reimbursement 298, , , , , , , ,384 1,118,671 1,224,349 1,352,473 1,476, ,833 10,190,113 Pharmacy Rebate Income Claim Refunds Receipts Investment Income Abandoned Claims Other Income Total Receipts 446, , , , ,107 1,113,765 1,256,175 1,409,444 1,581,045 1,726,036 1,893,474 2,056, ,699 14,559,191 Refunds Premium Refunds Total Refunds Expenses Medical Claim Expense 348, , , , , ,342 1,131,329 1,280,174 1,432,352 1,587,919 1,746,935 1,909, ,395 13,056,585 Pharmacy Claim Expense Administrative Expense 23,391 25,530 27,667 29,806 31,943 34,082 36,219 38,358 40,495 42,634 44,770 46,909 23, ,806 Variable Administrative Expense 8,596 10,882 13,167 15,453 17,738 20,024 22,309 24,595 26,880 29,166 31,452 33,737 8, ,000 Salary and Benefits Expense 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19, ,000 Contracted Outreach Fees 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000 Prescription Administrative Expense 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 29,000 Miscellaneous Expense 17,567 17,567 17,567 17,567 17,567 17,567 17,567 17,567 32,567 17,567 17,567 17,567 17, ,800 Professional Fees 22,333 22,333 34,333 22,333 22,333 22,333 22,333 22,333 22,333 22,333 26,333 22,333 22, ,000 Start-Up Expense Total Expense 446, , , , ,107 1,113,765 1,256,175 1,409,444 1,581,045 1,726,036 1,893,474 2,056, ,699 14,559,191 Cash Balance Month End $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Actual JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL YTD Enrollment Count Cash Balance BEGINNING OF MONTH 10, Receipts Premium Receipts 138, ,672 HHS Reimbursement 483, ,891 Pharmacy Rebate Income Claim Refunds Receipts Investment Income Abandoned Claims Other Income Total Receipts 622, ,563 Refunds Premium Refunds Total Refunds Expenses Medical Claim Expense 486, ,710 Pharmacy Claim Expense 45, ,135 Administrative Expense 21, ,996 Variable Administrative Expense 15, ,458 Salary and Benefits Expense 14, ,574 Contracted Outreach Fees 10, ,263 Prescription Administrative Expense Miscellaneous Expense 3, ,546 Professional Fees 4, ,398 Start-Up Expense Total Expense 602, ,127 Cash Balance 30, Checks written in excess of Cash Balance Available Cash Balance 30, (1) Assumes an annual claims expense trend of 15%. (2) Assumes a premium rate level of 100% of the standard risk rate. (3) Assumes a 10% rate increase in January of each year. (4) Assumes an increase in membership of 67 per month. Variance to Original Budget 03/01/2011 5

6 PCIP-WA 2011 Budgeted Cash Flow Favorable/(Unfavorable) JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER TOTAL YTD Enrollment Count (71) (71) Receipts Premium Receipts (9,194) (9,194) HHS Reimbursement 185, ,058 Pharmacy Rebate Income - - Claim Refunds Receipts - - Investment Income - - Abandoned Claims - - Other Income - - Total Receipts 175, ,864 Refunds Premium Refunds (415) (415) Total Refunds (415) (415) Expenses Medical Claim Expense (138,315) (138,315) Pharmacy Claim Expense (45,135) (45,135) Administrative Expense 1,395 1,395 Variable Administrative Expense (6,861) (6,861) Salary and Benefits Expense 4,426 4,426 Contracted Outreach Fees (5,263) (5,263) Prescription Administrative Expense 2,369 2,369 Miscellaneous Expense 14,020 14,020 Professional Fees 17,936 17,936 Start-Up Expense - - Total Expense (155,427) (155,427) Cash Balance 30,281 Checks written in excess of Cash Balance - Available Cash Balance 30, Admin Expense YTD 70, Claims Expense YTD 531, Premium Receipts YTD 138, Admin Budget YTD 98, Claims Budget YTD 348, Premiums Budget YTD 147,866 Favorable/ (Unfavorable) Variance 28,023 Favorable/ (Unfavorable) Variance (183,450) Favorable/ (Unfavorable) Variance (9,194) 2011 Admin % of Total Cost YTD ACTUAL 11.7% 2011 Admin % of Total Cost YTD BUDGET 22.0% 03/01/2011 6

7 PCIP-WA 2011 Administrative Expense Budget Variance Analysis Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total ship (1) ,446 Administrative Expense (2) 23,391 25,530 27,667 29,806 31,943 34,082 36,219 38,358 40,495 42,634 44,770 46, ,806 Variable Administrative Expense (3) 8,596 10,882 13,167 15,453 17,738 20,024 22,309 24,595 26,880 29,166 31,452 33, ,000 Salary and Benefits Expense (4) 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19,000 19, ,000 Contracted Outreach Fees (5) 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000 RX Benefit Management Fees (6) 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 2,417 29,000 Miscellaneous Expense (7) 17,567 17,567 17,567 17,567 17,567 17,567 17,567 17,567 32,567 17,567 17,567 17, ,800 Professional Fees (8) 22,333 22,333 34,333 22,333 22,333 22,333 22,333 22,333 22,333 22,333 26,333 22, ,000 Start Up Costs (9) , ,000 Total Budget Operating Expenses 98, , , , , , , , , , , ,963 1,678,606 Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Total ship (1) Administrative Expense (2) 21, ,996 Variable Administrative Expense (3) 15, ,458 Salary and Benefits Expense (4) 14, ,574 Contracted Outreach Fees (5) 10, ,263 RX Benefit Management Fees (6) Miscellaneous Expense (7) 3, ,546 Professional Fees (8) 4, ,398 Start Up Costs (9) Total Actual Operating Expenses 70, ,282 Variance Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Total ship (1) (71) (71) Administrative Expense (2) 1,395 1,395 Variable Administrative Expense (3) (6,861) (6,861) Salary and Benefits Expense (4) 4,426 4,426 Contracted Outreach Fees (5) (5,263) (5,263) RX Benefit Management Fees (6) 2,369 2,369 Miscellaneous Expense (7) 14,020 14,020 Professional Fees (8) 17,936 17,936 Start Up Costs (9) - - Total Variance Expenses 28, ,023 Notes: (1) ship is projected to increase by 67 members per month. ship budget developed by Leif and Assoc in (2) PMPM Administrative Expense reflects contractual fees and performance bonuses per member for TPA, UM and Network services (3) Variable Administrative Expense includes Case Management, marketing and outreach, special print materials/mailings, and other variable expenses (4) Salary and Benefits Expense reflect the combined amounts of the Executive Director, Executive Assistant and Program Director. (5) Contracted Outreach Fees reflects the amount of outreach expenses charged through the Washington Office of Insurance Commissioner. (6) Prescription Benefit Management Fees (7) Miscellaneous expense includes Board expenses, conference travel, insurance, agent commissions, phone/internet charges, and office expenses. (8) Professional fees include legal fees, auditing fees, actuarial fees, and consulting. (9) Start Up costs include legal and administrative costs associated with the origination of PCIP-WA, LLC. 03/01/2011 7

8 Pre existing Condition Insurance Pool PCIP WA Program Expense and Funding Summary (Highlighted cells represent actual data) Current IBNR 1,344,000 Projected 1) 2) 3) Admin Costs % of Projected Claims Claims PMPM Net Premiums Net Drawdown for Claims Less Interest Income Calculated Drawdowns Total Program Balance Federal Allotment 101,637, September % 17, , , , ,436,203 October % 286,018 5,608 27, ,165 34, , ,161,726 November % 260,978 3,070 66, ,682 91, , ,875,353 December % 441,240 3, , ,458 77, , ,478, Totals ,005,816 3, , , ,498 1,158,803 Revised 2010 Budget (Nov 2010) 811,186 2, , , ,553 1,275, Budget Variance F/(U) (194,630) 43,684 (150,946) 268, ,109 Projected Remaining 100,478,248 1) Measures requirement stated in Section C.2.2(a) Notify HHS when enrollment equals or exceeds 75% of budgeted enrollment. 2) Measures requirement stated in Section C.2.2(b) Notify HHS when YTD claims PMPM exceeds budgeted PMPM claims. 3) Measures requirement stated in Section C.2.2(c) Notify HHS when drawdowns project to exceed annual budgeted drawdowns. Net Drawdown for Claims in October 2010 is reduced by $18,380 of excess premiums from September Admin % of Total Costs 28.7% 03/01/2011 8

9 Pre existing Condition Insurance Pool PCIP WA Program Expense and Funding Summary (Highlighted cells represent actual data) Current IBNR 1,344,000 Projected 1) 2) Admin Costs 3) % of Projected Claims Claims PMPM Net Premiums Net Drawdown for Claims Less Interest Income Calculated Drawdowns Total Program Balance From 2010 Ending 100,478, January % 531,845 2, , ,588 70, , ,014,378 February % 680,257 3, , ,806 70, ,974 99,379,404 March % 586, , , , ,517 98,899,887 April % 716, , , , ,966 98,337,921 May % 861, , , , ,987 97,665,934 June % 993, , , , ,332 96,896,602 July % 1,131, , , , ,428 96,024,174 August % 1,280, , , , ,384 95,037,790 September % 1,432, , , ,693 1,118,671 93,919,119 October % 1,587, ,687 1,086, ,117 1,224,349 92,694,770 November % 1,746, ,001 1,205, ,539 1,352,473 91,342,297 December % 1,909, ,312 1,329, ,963 1,476,110 89,866, Totals 7, ,457,777 3,008 4,287,741 9,170,036 1,442,024 10,612,060 Prior Year Excess/(Shortfall) 117,109 Revised 2011 Budget (Nov 2010) 13,056,585 1,754 4,369,078 8,687,507 1,502,606 10,190, Budget Variance F/(U) (401,192) (81,337) (482,529) 60,582 (304,838) Projected Remaining 89,866,187 1) Measures requirement stated in Section C.2.2(a) Notify HHS when enrollment equals or exceeds 75% of budgeted enrollment. 2) Measures requirement stated in Section C.2.2(b) Notify HHS when YTD claims PMPM exceeds budgeted PMPM claims. 3) Measures requirement stated in Section C.2.2(c) Notify HHS when drawdowns project to exceed annual budgeted drawdowns Admin % of Total Costs 9.7% 03/01/2011 9

10 Pre existing Condition Insurance Pool PCIP WA Program Expense and Funding Summary (Highlighted cells represent actual data) Current IBNR 1,344,000 Projected 1) 2) Admin Costs 3) % of Projected Claims Claims PMPM Net Premiums Net Drawdown for Claims Less Interest Income Calculated Drawdowns Total Program Balance From 2011 Ending 89,866, January 1, % 2,075, ,590 1,393, ,290 1,545,250 88,320,937 February 1, % 2,245, ,835 1,520, ,566 1,676,003 86,644,934 March 1, % 2,418, ,080 1,650, ,341 1,822,945 84,821,989 April 1, % 2,595, ,325 1,784, ,117 1,948,644 82,873,345 May 1, % 2,776, ,570 1,922, ,392 2,090,661 80,782,684 June 1, % 2,961, ,814 2,063, ,668 2,236,564 78,546,120 July 1, % 3,150, ,059 2,209, ,945 2,386,418 76,159,702 August 1, % 3,343, ,304 2,359, ,221 2,540,288 73,619,414 September 1, % 3,540,296 1,027,549 2,512, ,497 2,713,244 70,906,170 October 1, % 3,741,376 1,070,794 2,670, ,773 2,860,355 68,045,815 November 1, % 3,946,681 1,114,039 2,832, ,551 3,031,193 65,014,622 December 1, % 4,156,284 1,157,283 2,999, ,327 3,197,328 61,817, Totals 17,094 36,952,447 11,033,242 25,919,205 2,129,688 28,048,893 Revised 2012 Budget (Nov 2010) 36,952,447 2,162 11,033,242 25,919,205 2,129,688 28,048, Budget Variance F/(U) Projected Remaining 61,817, Admin % of Total Costs 5.4% 03/01/

11 Pre existing Condition Insurance Pool PCIP WA Program Expense and Funding Summary (Highlighted cells represent actual data) Current IBNR 1,344,000 Projected 1) 2) Admin Costs 3) % of Projected Claims Claims PMPM Net Premiums Net Drawdown for Claims Less Interest Income Calculated Drawdowns Total Program Balance From 2012 Ending 61,817, January 1, % 4,370,255 1,320,581 3,049, ,603 3,255,277 58,562,017 February 1, % 4,588,669 1,368,150 3,220, ,899 3,430,418 55,131,599 March 1, % 4,811,601 1,415,720 3,395, ,195 3,623,076 51,508,523 April 2, % 5,039,127 1,463,289 3,575, ,491 3,794,329 47,714,194 May 2, % 5,271,323 1,510,858 3,760, ,786 3,983,251 43,730,943 June 2, % 5,508,268 1,558,428 3,949, ,083 4,176,923 39,554,020 July 2, % 5,750,041 1,605,997 4,144, ,961 4,375,005 35,179,015 August 2, % 5,996,723 1,653,566 4,343, ,258 4,579,415 30,599,600 September 2, % 6,248,395 1,701,136 4,547, ,553 4,802,812 25,796,788 October 2, % 6,505,141 1,748,705 4,756, ,849 5,001,285 20,795,503 ** November 2, % 6,767,045 1,796,274 4,970, ,143 5,224,914 15,570,589 December 2, % 7,034,195 1,843,844 5,190, ,439 5,443,790 10,126, Totals 26,742 67,890,783 18,986,548 48,904,235 2,786,260 51,690,495 Revised 2013 Budget (Nov 2010) 67,890,783 2,539 18,986,548 48,904,235 2,786,260 51,690, Budget Variance F/(U) Projected Remaining 10,126, Admin % of Total Costs 3.9% 03/01/

12 Pre existing Condition Insurance Pool PCIP WA Program Expense and Funding Summary (Highlighted cells represent actual data) Current IBNR 1,344,000 Projected 1) 2) Admin Costs 3) % of Projected Claims Claims PMPM Net Premiums Net Drawdown for Claims Less Interest Income Calculated Drawdowns Total Program Balance From 2013 Ending 10,126, January 1,479,316 1,479,316 90,938 1,570,254 8,556,545 February 1,356,040 1,356,040 88,386 1,444,426 7,112,119 March 1,232,763 1,232, ,835 1,337,598 5,774,521 April 1,109,487 1,109,487 78,284 1,187,771 4,586,750 May 986, ,211 75,732 1,061,943 3,524,807 June 862, ,934 73, ,115 2,588,692 July 739, ,658 54, ,324 1,794,368 August 616, ,382 52, ,497 1,125,871 September 493, ,105 64, , ,203 October 369, ,829 47, , ,362 November 246, ,553 44, ,014 (139,652) December 123, ,276 41, ,186 (304,838) 2014 Totals 9,615,555 9,615, ,083 10,431,638 Revised 2014 Budget (Nov 2010) 9,615,555 9,615, ,083 10,431, Budget Variance F/(U) Projected Remaining (304,838) 2014 Admin % of Total Costs 7.8% Blended Summary (Includes Actual data with Forecasted Amounts) 2010 Totals 2011 Totals 2012 Totals 2013 Totals 2014 Totals Summary Claims Net Premiums Net Drawdown for Claims Admin Costs Less Interest Income 1,005, , , ,498 13,457,777 4,287,741 9,170,036 1,442,024 36,952,447 11,033,242 25,919,205 2,129,688 67,890,783 18,986,548 48,904,235 2,786,260 9,615,555 9,615, , ,922,378 34,559,042 94,363,336 7,578,553 Admin % of Total Costs 5.6% **Note: $76,227,788 is 75% of the federal allotment. With current assumptions, projected to reach that mark in October /01/