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Board hears Blue Shield flex‑funded claims review; approves stabilization reserve amortization into 2017 rates
Summary
The board reviewed Blue Shield’s 2015 flex‑funded claims experience (102.26 loss ratio; March spike due to Sutter negotiations) and approved an actuary recommendation to amortize $5,531,718 into 2017 rates under the claim stabilization policy.
Board members heard a detailed review of Blue Shield’s 2015 claims experience and a recommendation to bring a portion of the carryforward deficit into next year’s rates.
The presenter reviewed subscriber counts (about 19,124 for the Blue Shield flex block in January), administrative and capitation lines, and explained two large anomalies: a March spike tied to delayed payments from Sutter Health negotiations and an October dip caused by a claims‑processing systems conversion. The actuary reported a 102.26 loss ratio for the period and said the plan overspent by approximately $6.4 million once reserves and adjustments were accounted for.
As required by the board’s claim stabilization policy (three‑year amortization with a one‑year lag), the actuary outlined how promised pledge funds (noted at roughly $8.84 million) were applied and presented carryforward figures. The firm recommended adding $5,531,718 into 2017 rates to amortize the deficit; board members asked clarifying questions about stop‑loss reimbursement, the administrative 11% increase (partly driven by a HIT/ACA tax), and how stop‑loss premiums are shown in the materials.
The board voted to approve the actuary’s stabilization reserve recommendation. The transcript records the motion passed by voice vote; a numeric roll call was not recorded.
