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Commission hears $7M surplus but warned about high‑cost claimants and rebate effect
Summary
Lockton reported a $7 million medical surplus through September driven by an approximately $12 million pharmacy rebate; without the rebate September’s medical loss ratio would have been ~109%. Lockton noted multiple high‑cost claimants near or above the $750,000 stop‑loss threshold.
Lockton presented the quarterly plan experience, reporting that medical claims through September show a $7 million surplus on the plan year to date. Lockton said a very significant pharmacy rebate, close to $12 million, was received in September and that the rebate materially changed the reported loss ratio: September’s loss ratio was 61.6% with the rebate but would have been about 109% without it.
Lockton told the commission that high‑cost claimant activity requires monitoring: two claimants have surpassed the $750,000 individual stop‑loss limit (one member reported at $500,000), and Lockton’s clinical team will provide projections for the actuary to estimate placeholders for the budget and to inform stop‑loss renewal assumptions. Lockton also provided separate metrics for 13,420 active members and 1,452 retirees, showing active members running at 86.4% of expected cost versus retirees at 140%.
