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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Actuarial Memorandum and Certification
Effective January 1, 2018
The purpose of this actuarial memorandum and certification is to provide information related to Molina Healthcare of Texas, Inc.’s (Molina) Part I Unified Rate Review Template submission to the Texas Individual Marketplace (Texas Marketplace). The actuarial memorandum and certification describe Molina’s rating methodology used to develop rates for Individual products offered on Texas Marketplace effective January 1, 2018. Molina will not market Individual products outside Texas Marketplace. Molina Healthcare of Texas, Inc. is a managed care organization that provides healthcare services for over 482,000 individuals eligible for Medicaid, Medicare, and Marketplace throughout the state of Texas. Molina Healthcare of Texas, Inc. is a licensed state health plan managed by its parent corporation, Molina Healthcare, Inc. Molina Healthcare, Inc., a FORTUNE 500 company, provides managed health care services under the Medicaid and Medicare programs and through the state insurance marketplaces. Through our locally operated health plans in 12 states across the nation and in the Commonwealth of Puerto Rico, Molina serves more than 4.2 million members. Dr. C. David Molina founded our company in 1980 as
a provider organization serving low‑income families in Southern California. Today, we continue his
mission of providing high quality and cost‑effective health care to those who need it most.
200 Oceangate Suite 100 Long Beach, CA 800.526.8196
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
TABLE OF CONTENTS GENERAL INFORMATION ................................................................................................................ 3
PROPOSED RATE INCREASE(S) ........................................................................................................ 4
MARKET EXPERIENCE ...................................................................................................................... 5
Experience Period Premium and Claims ...................................................................................... 5
Benefit Categories ........................................................................................................................ 6
Projection Factors ........................................................................................................................ 7
Credibility of Experience ............................................................................................................ 13
Paid to Allowed Ratio ................................................................................................................. 13
Risk Adjustment and Reinsurance ............................................................................................. 15
Non-Benefit Expenses and Profit & Risk .................................................................................... 17
PROJECTED LOSS RATIO ................................................................................................................ 21
APPLICATION OF MARKET REFORM RATING RULES ..................................................................... 21
Single Risk Pool .......................................................................................................................... 21
Index Rate .................................................................................................................................. 22
Market Adjusted Index Rate ...................................................................................................... 22
Plan Adjusted Index Rates ......................................................................................................... 23
Calibration .................................................................................................................................. 25
Consumer Adjusted Premium Rate Development ..................................................................... 27
PLAN PRODUCT INFORMATION .................................................................................................... 28
AV Metal Values ......................................................................................................................... 28
AV Pricing Values ....................................................................................................................... 30
Membership Projections ............................................................................................................ 31
Terminated Products ................................................................................................................. 33
Plan Type .................................................................................................................................... 33
Warning Alerts ........................................................................................................................... 33
MISCELLANEOUS INSTRUCTIONS .................................................................................................. 34
Effective Rate Review Information ............................................................................................ 34
Reliance ...................................................................................................................................... 32
Actuarial Certification ................................................................................................................ 35
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
GENERAL INFORMATION The information below documents the company identifying and contact information entered into the general information section of Worksheet 1 of the Unified Rate Review Template (URRT).
Company Identifying Information
Company Identifying Information
Legal Name: Molina Healthcare of Texas, Inc.
State: Texas
HIOS Issuer ID: 45786
Market: Texas Individual Marketplace
Effective Date: January 1, 2018
Company Contact Information
Company Contact Information
Contact Name: Evan Swalheim
Telephone #: 888.562.5442 x114611
Email: [email protected]
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
PROPOSED RATE INCREASE(S) Molina’s rate filing reflects the following rate changes by metal tier for Molina’s 251,266 members enrolled effective April 1, 2017 reported as of May 2017. The rate changes vary by metal tier due to changes in the Actuarial Value (AV) Pricing Values assigned to each metal plan that are applied to the Plan Adjusted Index Rate.
Rate Change by Plan
Plan ID Product Name
Metal Tier
Members Rate Change
Average Minimum Maximum
45786TX0010001 Molina Marketplace
Gold 1,050 27.4% 9.7% 112.4%
45786TX0010002 Silver 23,515 41.6% 25.3% 142.4%
45786TX0040001 Molina Marketplace Options
Silver 15,963 47.1% 29.9% 151.3%
0 Bronze NA NA NA NA
45786TX0020001 Molina Marketplace
Choice
Gold 2,382 32.7% 14.6% 121.8%
45786TX0020002 Silver 157,543 50.3% 33.1% 157.5%
45786TX0020003 Bronze 50,813 15.0% 2.3% 97.9%
Total 251,266 42.8% 2.3% 157.5%
Reason for Rate Increase(s): Molina identified the following factors contributing to the overall increase in Molina’s proposed rates. - Risk Transfer Payments: The risk transfer payments are expected to emerge at a higher level
than what was assumed in the rate development for the current rates. - Trend: Molina trended the experience period claims at a 5.3% annualized trend rate.
- Duration: Molina applied a durational factor in consideration of higher utilization for members in
their second year compared to their first year as fewer first year members are anticipated in the projection period compared to the experience period.
- Provider Reimbursement: Molina anticipates higher unit costs in the projection period than the experience period due to higher reimbursement associated with an expanded provider network.
- Risk and Contingency Margin: A risk and contingency margin is added to our premiums to account for the increased risk and volatility associated with the line of business.
- Individual Mandate Adjustment: An individual mandate adjustment is included in our rates due
to less stringent federal requirements in 2018.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
- Cost Sharing Reduction Adjustment: The rate methodology assumes that Cost Sharing Reduction
subsidies does not continue throughout 2018. As a result, the Paid to Allowed ratios significantly increases in the Silver 100 and Silver 150 plans.
- Health Insurer Fee: The return of the Health Insurer Fee, after the one year moratorium
expiration, increased our proposed rates. Molina identified factors that mitigated the overall rate increase: - Experience Period Morbidity: The single risk pool claims experience is much more favorable than
what was assumed in the rate development for the current rates.
- Risk Transfer Formula: A modification to the 2018 benefit year risk adjustment transfer formula to account for administrative costs will reduce our expected risk transfer payments and resulting premiums compared to the previous year’s risk transfer formula.
MARKET EXPERIENCE Molina’s 2016 experience in Part I of the Unified Rate Review Template (URRT) is based on 1,338,336 member months or 111,528 average members.
Experience Period Premium and Claims
Paid Through Date: The market experience reported in Worksheet 1, Section I of the URRT represents 2016 incurred claims paid through March 31, 2017. The IBNR factors applied to the 2016 claims experience were updated with data through April 30, 2017. Premiums (Net of MLR Rebate) in Experience Period: The premiums reported in Worksheet 1, Section I of the URRT represent the earned premium from 2016, excluding risk adjustment transfer payments for the 2016 benefit year. Molina has not accrued any amount for MLR rebates for the 2016 benefit year. No amounts were subtracted from the earned premium for any reductions prescribed by the federal MLR formula, such as taxes and assessments. Allowed and Incurred Claims in Experience Period: The following table reports the allowed and incurred claims during the 2016 experience period.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Allowed claims for the experience period were calculated by adding the plan incurred paid claims and the member cost-sharing for medical and pharmacy claims. The allowed amount reported for capitation is the plan paid amount. Molina applied completion factors to both the allowed and incurred medical claim amounts. The completion factors were developed separately for inpatient and non-inpatient medical claims based on Molina’s Texas Marketplace data. The IBNR factors applied to the 2016 claims experience were updated with data through April 2017. The IBNR factor applied to the allowed and incurred claims is 1.008. Molina does not apply IBNR factors to capitation and pharmacy claims. Molina did not consider ACA related risk adjustment, reinsurance, and risk corridor payments/ receivables in the experience data entered in Worksheet 1, Section I and Section II of the URRT. All medical claims are paid through Molina’s claims system. Pharmacy claims are processed through Molina’s pharmacy benefit manager.
Benefit Categories
Molina assigned all experience claims to benefit categories utilizing Milliman’s MedInsight Health Cost Guidelines (HCG) grouper. The following table displays the measurement units related to each benefit category.
2016 Experience Period Claims (paid through: March 2017)
Item Description Medical Pharmacy Capitation Total
a Allowed $199,043,098 $39,325,830 $347,967 $238,716,895
b Member Cost Share ($24,078,690) ($10,208,865) $0 ($34,287,554)
c = a + b Subtotal $174,964,408 $29,116,966 $347,967 $204,429,341
d IBNR 1.009 1.000 1.000 1.008
e = c x d Subtotal $176,596,272 $29,116,966 $347,967 $206,061,205
f Cost Share Reduction
($36,529,633)
g = e + f Incurred Claims $169,531,572
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Benefit Categories
Benefit Category Description
Inpatient Hospital Days
Outpatient Hospital Visits
Professional Services
Other Medical Services
Capitation Benefit Period
Prescription Drug Prescription
Projection Factors
Changes in the Morbidity of Population: The morbidity of Molina's covered population relative to the entire Texas Marketplace population is expected to slightly decrease between the experience period and the projection period. The relative risk score in the projection period was compared to the relative risk score from the experience period to derive a population morbidity adjustment. Molina used the results from the CMS Final Summary Report on Risk Adjustment for the 2016 Benefit Year released on June 30, 2017 to derive the relative risk of Molina’s members for the 2016 experience period. For the 2017 projection period, Molina estimated the relative risk of its anticipated membership by assuming that the relative risk scores would remain consistent with the 2016 risk scores within each metal tier. The development of Molina’s 2018 relative risk score estimate was normalized to remove expected changes to the statewide risk score. The resulting relative risk score for the 2018 projection period is 0.722, which results in an acuity factor of 0.988 as shown in the table below. The acuity factor was not applied to capitation costs.
Population Morbidity Adjustment ― Experience Rate
Policy Year
Cohort Member Mix Relative
Risk
2016
New Members
Renewal Members
Total 100% 0.731
2017
New Members 60% 0.682
Renewal Members 40% 0.760
Total 100% 0.714
2018
New Members
Renewal Members
Total 100% 0.722
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
a 2016 Relative Risk 0.731
b 2018 Relative Risk 0.722
c = b / a Acuity Factor 0.988
Molina also applied an adjustment factor to the experience period claims to account for the anticipated change in the morbidity of the population due to weaker enforcement of the individual mandate and/or the perception of weaker enforcement. As a result, we anticipate a reduced Texas Marketplace population with a higher morbidity than the experience period. We modeled the impact of a subset of our population dropping coverage, which included a portion of: a) members with low claims in the previous year, b) members with higher member premiums, and c) members who are younger. We expect the risk pool to contract and the average morbidity to increase by 1.062. The results of the study are shown in the table below.
Individual Mandate Impact
Mandate Enforced Mandate Not Enforced Mandate
Age Category Member Months Allowed PMPM Member Months Allowed PMPM Impact
a b c = b / a d e f = e / d g = f / c
< 21 182,615 11,785,344 64.54 169,379 11,493,885 67.86 1.051
21 to 29 193,820 20,221,102 104.33 177,529 19,878,191 111.97 1.073
30 to 39 189,545 25,070,456 132.27 172,507 24,698,762 143.18 1.082
40 to 49 279,872 45,801,979 163.65 261,585 45,372,667 173.45 1.060
50 to 59 336,896 85,988,394 255.24 319,580 85,533,072 267.64 1.049
60+ 155,588 51,655,003 332.00 149,045 51,455,204 345.23 1.040
Total 1,338,336 240,522,278 179.72 1,249,625 238,431,781 190.80 1.062
Other Adjustments: Changes in Demographics: Molina applied a factor to the experience period claims to reflect the anticipated change in the demographic mix from the 2016 experience data to the 2018 projection period. The anticipated demographic mix is based largely on a review of enrollment through March 2017 compared to the experience period. Molina anticipates that its 2018 demographics will be consistent with its 2017 demographics for the Silver 100, Silver 150, Gold, and Bronze plans. Molina does not project members in the Silver 200 and Silver 250 plans to remain in 2018 due to the removal of Cost Sharing Design subsidies, which changes the demographic mix slightly. The demographic adjustments were developed for the major categories of service for fee-for-service claims as shown in the table below. Demographic adjustments were not made to capitation costs. The total demographic adjustment made to the 2016 experience period data was 1.021.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Population Demographic Adjustment
Member Mix Claim Costs PMPM
Age Gender Experience
Period Projection
Period IP OP Prof Rx
0-14 M 2.9% 2.6% 52.56 16.59 54.70 8.41
0-14 F 2.7% 2.5% 36.64 13.78 48.89 6.41
15-19 M 2.5% 2.4% 23.03 25.39 32.88 11.49
15-19 F 2.6% 2.4% 18.48 29.56 46.25 12.67
20-29 M 7.8% 8.2% 35.46 28.83 30.74 21.97
20-29 F 9.8% 9.6% 44.27 46.75 68.73 16.82
30-39 M 6.5% 6.2% 43.82 38.57 43.05 34.99
30-39 F 8.4% 7.9% 53.70 68.74 87.02 22.95
40-49 M 9.1% 8.6% 63.31 52.28 54.00 41.64
40-49 F 11.9% 11.9% 61.93 82.57 92.12 31.13
50-59 M 11.2% 11.2% 127.92 84.63 83.22 54.35
50-59 F 13.3% 13.9% 91.93 110.64 112.66 46.53
60+ M 5.2% 5.7% 210.39 127.67 124.47 56.51
60+ F 6.0% 7.0% 146.31 135.33 141.60 59.18
Total 100% 100%
a 2016 77.54 70.98 79.40 34.90
b 2018 79.49 72.63 80.69 35.55
c = b / a Adjustment 1.025 1.023 1.016 1.019
The claim costs to determine the estimated impact of demographic mix changes from 2016 to 2018 are calculated based on Molina’s nationwide 2016 claims experience from 9 states representing over 543,000 members.
Duration Adjustment: Molina conducted a study of member costs by duration and observed higher utilization for members in their second year of duration compared to their first year of duration. A durational factor is applied to Molina’s 2018 pricing in consideration of this phenomenon. A duration factor is applied to the experience period claims to reflect the change in claims due to the average duration mix from the 2016 experience data to the 2018 projection period.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Since the experience period associated with each member’s durational claims experience varies according to their first enrollment year with Molina, all claims in the durational study were trended to the midpoint of the experience period. Because of the limited data available for membership with enrollment of more than two years, it has been assumed that costs stabilize after two years. The table below shows the adjustment factors that represent the average costs for each duration relative to the costs observed during duration 1. The duration impact on the 2018 projection period is primarily due to fewer new members anticipated for the projection period compared to the 2016 experience period. Duration 1 membership mix is 92% in the experience period compared to only 3% for the projection period. The overall duration adjustment is 1.105.
Duration Adjustment
Member Mix Adjustment Factor
Duration Experience
Period Projection
Period IP OP Prof Rx
1 92% 3% 1.000 1.000 1.000 1.000
2 8% 63% 1.120 1.120 1.120 1.120
3+ 0% 34% 1.120 1.120 1.120 1.120
Total 100% 100%
a 2016 1.010 1.010 1.010 1.010
b 2018 1.116 1.116 1.116 1.116
c = b / a Adjustment 1.105 1.105 1.105 1.105
Cost Sharing Design: Members will utilize services less frequently when their responsibility of cost-sharing increases. Molina calculated the cost sharing design utilization factor by estimating the members by metal tier and cost-sharing subsidy. Molina assigned each metal tier and cost-sharing subsidy tier a cost sharing design utilization factor and calculated the change in the cost sharing design factor between the experience period and the projection period. Molina applied the difference in the factors as an adjustment to the experience period. Cost sharing design utilization factors were developed by comparing allowed claims costs in the experience period by metal tier and cost-sharing plan variation after normalizing for differences in age and estimated risk transfer payments to ensure that differences due to health status are not included in the adjustment.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Cost Share Design (CSD) Adjustment
Product Name Metal FPL 2016 2018
MMs CSD MMs CSD
Molina Marketplace Gold Base 10,368 1.123 12,205 1.123
Molina Marketplace Silver Base 30,475 1.000 0 1.000
Molina Marketplace Silver CSR 200-250 30,627 0.959 0 0.959
Molina Marketplace Silver CSR 150-200 75,297 0.919 79,522 0.919
Molina Marketplace Silver CSR 100-150 62,470 0.903 91,202 0.903
Molina Marketplace Options Silver CSR 200-250 0 0.976 0 0.976
Molina Marketplace Options Silver CSR 150-200 0 0.936 36,425 0.936
Molina Marketplace Options Silver CSR 100-150 0 0.939 109,148 0.939
Molina Marketplace Choice Gold Base 9,473 1.064 27,536 1.064
Molina Marketplace Choice Silver Base 59,321 0.993 0 0.993
Molina Marketplace Choice Silver CSR 200-250 68,080 0.976 0 0.976
Molina Marketplace Choice Silver CSR 150-200 176,577 0.936 346,521 0.936
Molina Marketplace Choice Silver CSR 100-150 635,736 0.939 1,180,461 0.939
Molina Marketplace Choice Bronze Base 179,605 0.921 582,306 0.921
1,338,029 0.942 2,465,326 0.935
2016 CSD 0.942
2018 CSD 0.935
CSD Factor Adjustment 0.992
Unit Cost Adjustment: Molina applied a factor to represent the difference in anticipated unit costs between 2016 base period and 2018 projection period. Molina has expanded its provider network to support membership growth beginning in 2016 and the Unit Cost Adjustment reflects the difference in average unit costs due to change in utilization mix among the provider network. Internal Reinsurance: Molina applied a factor for reinsurance coverage purchased exclusive of the federal reinsurance program. Changes in Benefits: No factors were applied to adjust the experience period claims for benefit changes.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Trend Factors: Trend factors were applied separately for unit cost and utilization and by each major benefit category shown in Worksheet 1, Section I of the URRT. Molina trended the experience period claims forward 24 months from the midpoint of the base period, July 2016, to the midpoint of the projection period, July 2018. Unit cost trends were developed by comparing anticipated changes in provider contracts between the 2016 experience period and the 2018 projection period. The contract changes were calculated for the major service categories by weighing fee schedule changes in each rating area with the 2016 membership. Utilization trends were developed through a review of the allowed claims experience from 9 states representing over 543,000 members in 2016 and 212,000 members in 2015. The utilization data was normalized using concurrent risk scores from Milliman’s MARA risk model for each service category to account for differences in demographics and health status between the two comparison periods. Additionally, actuarial judgment was used in choosing the trends when the normalized historical data did not produce reasonable results. The chart below shows each annual trend by category of service.
Annual Claims Trends
Benefit Utilization Unit Cost
Total
IP 2.5% 1.4% 3.9%
OP 2.5% 1.9% 4.4%
Prof 3.0% 0.4% 3.4%
Other 2.5% 1.0% 3.5%
Rx 5.0% 8.0% 13.4%
Cap 0.0% 0.0% 0.0%
Total 3.0% 2.3% 5.3%
The following tables summarize all of the adjustments made to the data in the URRT, Worksheet 1.
Adjustments -- Experience to Projection Period (Population Risk Morbidity)
a b c = a*b
Benefit Category Acuity Factor
Individual Mandate
Population Risk
Morbidity
Inpatient Hospital 0.988 1.062 1.049
Outpatient Hospital 0.988 1.062 1.049
Professional 0.988 1.062 1.049
Other Medical 0.988 1.062 1.049
Capitation 0.988 1.062 1.049
Prescription Drug 0.988 1.062 1.049
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Adjustments -- Experience to Projection Period (Other)
a b c d e f g h = prod(a:g)
Benefit Category Utilization
Adjustment Demographic Adjustment
Unit Cost Adjustment
Duration Factor
Cost Sharing Design
Non-EHB Benefits
Reinsurance Total
Inpatient Hospital 1.000 1.025 1.180 1.105 0.992 1.000 1.002 1.330
Outpatient Hospital 1.000 1.023 1.161 1.105 0.992 1.000 1.002 1.306
Professional 1.000 1.016 1.041 1.105 0.992 1.000 1.002 1.163
Other Medical 1.000 1.016 1.041 1.105 0.992 1.000 1.002 1.163
Capitation 1.000 1.000 1.000 1.105 0.992 1.000 1.002 1.099
Prescription Drug 1.000 1.019 1.000 1.105 0.992 1.000 1.002 1.120
Inclusion of Capitation Payments: All capitated payments are included in the experience data and rate development.
Credibility of Experience
Molina calculated the credibility percentage to apply to the experience data based on experience period member months and the credibility formula below:
Molina Credibility Table
Member Months Experience Period Manual Rate
Low High Weight Weight
0 11,999 0.0% 100.0%
12,000 23,999 50.0% 50.0%
24,000 + 100.0% 0.0%
Molina’s 2016 experience in Part I of the Unified Rate Review Template (URRT) is based on 1,338,336 member months, resulting in a credibility percentage of 100.0%. Molina believes this method is consistent with the applicable American Academy of Actuaries’ Actuarial Standards of Practice (ASOP) No. 25 Credibility Procedures.
Paid to Allowed Ratio The Paid to Allowed ratio reflects the estimated cost-sharing in the projection period. The actuarial value (AV) for each product was based on Molina’s actual claims experience, and was adjusted based on expected cost-sharing differences between the 2016 and 2018 plans. For plans that are not in the
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
experience period, Molina Marketplace Options plans, the Paid to Allowed ratios were derived from the Molina Marketplace Choice plans, multiplied by a ratio of the differences in values from the AV Calculator. This rate methodology assumes the Cost Sharing Reduction subsidies are not funded. The Paid to Allowed ratios for the Silver 100 and Silver 150 plans represent the amounts without the Cost Sharing Reduction subsidies.
Paid to Allowed Ratio -- Plans with 2016 Experience
a b c d = a * (c /
b)
Plan ID Product Name Metal
2016 Paid to
Allowed Ratio
2016 AV Calculator
Values
2018 AV Calculator
Values
2018 Paid to
Allowed Ratio
45786TX0010001 Molina Marketplace Gold 83.1% 80.8% 78.4% 80.6%
45786TX0010002 Molina Marketplace Silver 90.4% 91.3% 90.7% 89.9%
45786TX0020001 Molina Marketplace
Choice Gold 83.1% 80.1% 77.0% 79.9%
45786TX0020002 Molina Marketplace
Choice Silver 92.1% 93.2% 93.3% 92.3%
45786TX0020003 Molina Marketplace
Choice Bronze 60.4% 61.9% 62.5% 61.0%
Paid to Allowed Ratio -- Plans without 2016 Experience
a b c d = a * (c /
b)
Plan ID Product Name Metal
2018 Choice
Plan Paid to
Allowed Ratio
2018 Choice
Plan AV Calculator
Values
2018 Options Plan
AV Calculator
Values
2018 Paid to
Allowed Ratio
45786TX0040001 Molina Marketplace
Options Silver 92.3% 93.3% 92.9% 91.9%
45786TX0040003 Molina Marketplace
Options Bronze 61.0% 62.5% 62.7% 61.2%
The Paid to Allowed ratio is the average of the AVs weighted by projected members. The table below documents the Paid to Allowed ratio factor entered into the URRT, Worksheet I, Section III.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Paid to Allowed Ratio
Plan ID Product Name Metal Member
% Paid to Allowed
45786TX0010001 Molina Marketplace Gold 0.5% 0.806
45786TX0010002 Molina Marketplace Silver 6.9% 0.899
45786TX0040001 Molina Marketplace Options Silver 5.9% 0.919
45786TX0020001 Molina Marketplace Choice Gold 1.1% 0.799
45786TX0020002 Molina Marketplace Choice Silver 61.9% 0.923
45786TX0020003 Molina Marketplace Choice Bronze 23.6% 0.610
Total 100% 0.845
Risk Adjustment and Reinsurance
Experience Period Risk Adjustment PMPM: Molina used the results from the CMS Final Summary Report on Risk Adjustment for the 2016 Benefit Year which was published by CMS on June 30, 2017. The report includes a risk transfer payable of $93.18 per member per month (PMPM) or $124,695,669 for the 2016 experience period.
Projected Risk Adjustments PMPM: Molina estimated the risk transfer amount for 2018 using the 2016 experience period risk transfer amounts. The 2018 risk transfer estimates were developed by projecting 2017 relative risk scores and transfer payments, then projecting 2018 relative risk scores and transfer payments. The population was grouped into the following cohorts:
- 2017 Renewal Members – Some of Molina’s current members previously had coverage in 2016 and renewed with Molina in 2017. Molina relied on the renewal member’s 2016 experience and risk scores and assumed their relative risk score would be consistent in 2017.
- 2017 New Members – To estimate the relative risk of the 2017 new members, Molina referred to the estimated risk scores and transfer amounts from the 2016 experience
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
period. Estimated risk scores were adjusted in consideration of the metal tier mix between the 2016 members and the 2017 new members.
- 2018 Members – Molina assumed the 2018 members would have the same relative risk scores as the 2017 members, with consideration for the metal tier mix between the two years.
The risk transfer payment amounts in the projection period reflect expected changes in the relative risk of the population, changes to the statewide premium, and a modification to the 2018 benefit year risk adjustment transfer formula which reduces the total transfer payment by 14% to account for administrative costs. The following table summarizes the development of the 2018 risk transfer estimate.
The resulting 2018 risk transfer payable estimate is $130.58 per member per month (PMPM). Molina added $0.14 PMPM in projected risk adjustment user fees to the $130.44 PMPM risk transfer payable estimate and entered the total of $130.58 PMPM in the URRT Worksheet I, Section III. The
Item Term Description Molina Statewide
a PLRS i Plan Liability Risk Score 1.170 1.463
b IDF iInduced Demand Factor 1.025 1.031
c GCF i Geographic Cost Factor 1.028 1.000
PLRS x IDF x GCF 1.232 1.509
Molina Relativity 0.817
g AV iActuarial Value 0.682 0.678
h ARF iAllowable Rating Factor 1.614 1.539
i IDF iInduced Demand Factor 1.025 1.031
j GCF i Geographic Cost Factor 1.028 1.000
AV x ARF x IDF x GCG 1.159 1.076
Molina Relativty 1.077
-0.261
m Statewide Average Premium 581.76
Statewide Average Premium Adjusted 500.31
o = l x n T iMolina Risk Transfer Estimate -130.44
p Risk Adjustment User Fee -0.14
r = o + p Total Risk Transfer -130.58
l = f - k
n = m x 86%
Risk Transfer Estimate
f = c x d x e
f(Molina) / f(Statewide)
k = g x h x I x j
k(Molina) / k(Statewide)
sP
x 86%
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
anticipated transfer revenue was applied to the Index Rate in the development of the Market Wide Paid Index. Experience Period Reinsurance PMPM: Molina relied on internal estimates for the 2016 experience period. Projected ACA Reinsurance Recoveries Net of Reinsurance Premium: Not applicable.
Non-Benefit Expenses and Profit & Risk
Administrative Expense Load: Molina reviewed administrative costs booked to Marketplace products from 2014 to 2016 to develop administrative costs required to manage the Texas Marketplace population. Molina used an internal administrative cost budget on a PMPM basis and converted the costs to an overall percentage of premiums to apply to the Texas Marketplace rates. Amounts for broker commissions were added to the administrative costs. The expected administrative expense load is 11.9%. The administrative expense is lower than the 13.5% administrative expense load included in Molina’s previously approved rate filing.
Administrative Expense Load
Description PMPM % of Premium
Corporate and Plan Expense $36.66 7.5%
Bank Service Charges $0.79 0.2%
Quality Expenses $12.26 2.5%
Broker Commissions $8.73 1.8%
Total $58.44 11.9%
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
The administrative expense load varies by metal tier as shown in the table below. Corporate and Plan Expense and Quality Expenses were applied by constant percentage loads. Bank Service Charges and Broker Commissions were applied as fixed PMPM values for all plans.
Administrative Expense Load
Product Name Metal Corporate
& Plan Expense
Bank Service Charges
Quality Expenses
Broker Commissions
Total % of
Premium
a b c d e f g = sum (c:f)
Molina Marketplace
Gold $41.83 $0.79 $13.99 $8.73 $65.33 11.7%
Silver $38.90 $0.79 $13.01 $8.73 $61.42 11.8%
Molina Marketplace
Options Silver $39.76 $0.79 $13.30 $8.73 $62.58 11.8%
Molina Marketplace
Choice
Gold $41.45 $0.79 $13.86 $8.73 $64.83 11.7%
Silver $39.95 $0.79 $13.36 $8.73 $62.82 11.8%
Bronze $26.28 $0.79 $8.79 $8.73 $44.58 12.7%
Total $36.66 $0.79 $12.26 $8.73 $58.44 11.9%
- Broker Commissions: Molina expects broker commissions of $8.73 PMPM in 2018, based on
Molina’s broker-sold business in 2017 and a projection of new and renewing members sold through the broker channel.
Commission Estimate
Policy Cohort
Broker Commission Commission
Year Sold % $ PMPM
2018
New Members (Open Enrollment) 48% $3,767,344 $1.87
New Members (Special Enrollment) 52% $0 $0.00
Renewal Members (Open Enrollment) 48% $12,632,430 $6.26
Renewal Members (Special Enrollment) 48% $1,217,034 $0.60
Total 48% $17,616,808 $8.73
Profit & Risk Margin: Molina’s target after-tax margin is 3.0%. The target margin is unchanged from Molina’s previously approved rate filing. Risk and Contingency Margin: A risk and contingency margin is added to our premiums to account for the increased risk and volatility associated with the line of business. The risk and contingency margin is consistently applied for all metal tiers and considers legislative/political risk, changes in
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
competitor participation, enrollment volatility, profitability volatility, provider contracting structure risk, shifts in metal mix, risk transfer estimate volatility, and not having an opportunity to revise risk adjustment estimates is made available after the initial rate filing. The risk and contingency margin is 4.0%. Taxes and Fees: Molina’s 10.0% estimate of taxes and fees is higher than the previously approved rate filing estimate of 5.3%. The increased taxes and fees estimate is due to the return of the Health Insurer Fee that was not included in the prior year’s rate filing. The taxes and fees estimate is comprised of the following: - Texas Marketplace Exchange Fee: Texas Marketplace will charge a fee of 3.5% of premium for
Molina’s members enrolled in Texas Marketplace. The Exchange user fee is applied at the Market adjusted Index Rate.
- Health Insurer Fee: A Health Insurer Fee (HIF) of 3.1% is included in the taxes and fees section of
the URRT. Molina’s tax department provided estimates for the HIF of 2.0%, grossed up to 3.1% to account for the non-deductible nature of the HIF in determining income tax expenses.
- PCORI Fee: Molina expects to pay $2.47 per member per year (PMPY) in patient centered
outcome (PCORI) fees. - Federal Income Tax: An estimated 1.6% of premiums will be paid in Federal income taxes based
on an anticipated 35% federal tax rate.
Taxes and Fees
Taxes and Fees PMPM % of Premium
Health Insurer Fee $15.10 3.1%
PCORI Fee ($2.47 PMPY) $0.21 0.0%
Premium Tax & Other Fees $8.58 1.8%
Federal Taxes $7.92 1.6%
Exchange Fee $17.16 3.5%
Total Taxes and Fees $48.97 10.0%
Single Risk Pool Premium $490.35
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Taxes and Fees vary by metal tier as shown in the table below.
Taxes and Fees
Product Name Metal Health Insurer
Fee
PCORI Fee
Premium Tax & Other Fees
Federal Taxes
Exchange Fee
Total % of
Premium
a b c d e e f g = sum (c:f)
Molina Marketplace
Gold $17.23 $0.21 $8.34 $9.04 $16.68 $51.50 9.2%
Silver $16.02 $0.21 $8.91 $8.40 $17.82 $51.36 9.9%
Molina Marketplace
Options Silver $16.38 $0.21 $9.04 $8.59 $18.07 $52.29 9.8%
Molina Marketplace
Choice
Gold $17.08 $0.21 $8.30 $8.96 $16.59 $51.12 9.2%
Silver $16.46 $0.21 $9.06 $8.63 $18.13 $52.48 9.8%
Bronze $10.83 $0.21 $7.13 $5.68 $14.25 $38.09 10.8%
Total $15.10 $0.21 $8.58 $7.92 $17.16 $48.97 10.0%
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
PROJECTED LOSS RATIO The projected medical loss ratio (MLR) for 2018 using the federally prescribed MLR methodology is 81.8%.
MLR Demonstration
Federal Prescribed MLR Formula
MLR = [(i + q - s + n - r)/{(p + s - n + r) - t - f - (s - n + r)}] + c
s = transitional reinsurance receipts $0.00
n = risk corridors and risk adjustment payments $130.58
r = issuer’s risk corridors and risk adjustment receipts $0.00
= s - n + r ($130.58)
MLR = [(i + q - -130.58)/{(p + -130.58) - t - f - (-130.58)}] + c
i = incurred claims $218.04
q = expenditures on quality improving activities $12.26
= i + q $230.30
MLR = [(230.30 - -130.58)/{(p + -130.58) - t - f - (-130.58)}] + c
MLR = [(360.88)/{(p + -130.58) - t - f - (-130.58)}] + c
p = earned premiums $490.35
MLR = [(360.88)/{(490.35 + -130.58) - t -f - (-130.58)}] + c
MLR = [(360.88)/{(359.78) - t -f - (-130.58)}] + c
t = Federal and State taxes and assessments $31.81
f = licensing and regulatory fees, incl. transitional reins $17.16
= -t - f ($48.97)
MLR = [(360.88)/{(359.78) - 48.97 - (-130.58)}] + c
MLR = [(360.88)/{441.38}] + c
MLR = [81.8%] + c
c = credibility adjustment, if any 0.0%
MLR = [81.8%] + 0.0%
MLR = 81.8%
APPLICATION OF MARKET REFORM RATING RULES
Single Risk Pool
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Molina’s single risk pool is in accordance with 45 CFR part 156, §156.80. Molina has no transitional products/plans or grandfathered products that should be included in the development of the single risk pool.
Index Rate The index rate is developed following the specifications of 45 CFR part 156.80(d)(1). The index rate for the projection period is estimated to be $257.92. The index rate represents the estimated total allowed claims experience for the essential health benefits within the Covered Texas Marketplace. The index rate does not include adjustments for the risk adjustment and reinsurance programs or an adjustment for the Covered Texas Marketplace user fee. The projected allowed claims in Worksheet 1, Section III of the URRT is $257.92, which is consistent with the Projected Allowed Claims PMPM in the exhibit below.
Index Rate
Item Description Allowed Claims
a 2016 Allowed Claims $179.72
b Demographic Adjustment 1.021
c Duration Factor 1.105
d Unit Cost Adjustment 1.099
e Utilization Trend 1.061
f Unit Cost Trend 1.046
g Acuity Adjustment 0.988
h Reinsurance 1.002
i Individual Mandate Adjustment 1.062
j = product(a:i) Cost Sharing Design 0.992
k = product(a:j) Index Rate $257.92
l = j + k Non-EHB 0.00
m = k + l Projected Allowed Claims $257.92
Market Adjusted Index Rate
The market adjusted index rate is developed following the specifications of 45 CFR part 156.80(d)(1). Molina modified the index rate provided in URRT Worksheet I to a market adjusted index rate as follows:
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Market Adjusted Index Rate
Item Description Paid Basis
Adjustment Allowed
Basis Comments
a URRT Index Rate $257.92 URRT,
Worksheet 1
b Risk Adjustment $130.58 0.845 $154.46
c Exchange Fee $17.16 0.845 $20.30 See Taxes &
Fees
d Market Adjusted Index Rate $432.68 d = a + b + c
Plan Adjusted Index Rates
The plan adjusted index rates are developed following the specifications of 45 CFR part 156.80(d)(2).The plan adjusted index rates are entered in Worksheet 2, Section IV, of the URRT Template. Molina calculated the plan adjusted index rates by applying plan specific level adjustments for actuarial value, cost sharing utilization, additional benefits, and administrative costs, excluding exchange user fees, to the market adjusted index rate.
Plan Adjusted Index Rates
Product Name Metal Market
Adjusted Index Rate
Actuarial Value
Cost Sharing
Adj.
Benefits in Addition to EHBs
Admin Costs
Plan Adjusted
Index Rate
a b c d e f g h = product (c:g)
Molina Marketplace Gold 432.68 0.806 1.200 1.000 1.336 559.43
Silver 432.68 0.899 1.000 1.000 1.339 520.28
Molina Marketplace Options
Silver 432.68 0.919 1.000 1.000 1.338 531.85
Molina Marketplace Choice
Gold 432.68 0.799 1.200 1.000 1.336 554.42
Silver 432.68 0.923 1.000 1.000 1.338 534.30
Bronze 432.68 0.610 0.983 1.000 1.355 351.49
- AV and Cost Sharing Design: The table below shows the details of Molina’s AVs and Cost Sharing
Design Adjustment factors:
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Actuarial Value and Cost Sharing Adjustment
Plan ID Product Name Metal Member Actuarial Value Cost Sharing Adj.
45786TX0010001 Molina Marketplace
Gold 1,017 0.806 1.200
45786TX0010002 Silver 14,227 0.899 1.000
45786TX0040001 Molina Marketplace
Options Silver 12,131 0.919 1.000
45786TX0020001 Molina Marketplace
Choice
Gold 2,295 0.799 1.200
45786TX0020002 Silver 127,248 0.923 1.000
45786TX0020003 Bronze 48,526 0.610 0.983
Total 205,444 0.845 1.000
- Provider Network, Delivery System Characteristics, and Utilization Management Practices:
Molina did not vary plan rates for variation of provider network, delivery system characteristics, and utilization management.
- Catastrophic plans: Not Applicable.
- Administrative costs, excluding Exchange User Fees: Molina converted all administrative costs, excluding the Covered Texas Marketplace Fee, to a multiplicative factor, which varies for each plan according to differences in premium. The overall multiplicative factor is shown in the table below.
Administrative Costs Excluding Exchange Fee
Item Description % of Premium
a Administrative Expense Load 11.9%
b Profit Margin 3.0%
c Risk & Contingency 4.0%
d Taxes & Fees excl Exchange Fee 6.5%
e = a + b + c + d
Total 25.4%
f= 1 / (1 - e) Administrative Factor 1.341
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
The administrative factors vary by metal tier as shown in the table below.
Administrative Costs Excluding Exchange Fee
Product Name Metal Admin. Expense
Load
Profit Margin
Risk & Contingency
Taxes & Fees (excl. Exchange
Fee) Total
Admin. Factor
a b c d e f g = sum (c:f) h = 1 / (1-g)
Molina Marketplace
Gold 11.7% 3.0% 4.0% 6.2% 24.9% 1.332
Silver 11.8% 3.0% 4.0% 6.4% 25.3% 1.338
Molina Marketplace
Options Silver 11.8% 3.0% 4.0% 6.4% 25.2% 1.337
Molina Marketplace
Choice
Gold 11.7% 3.0% 4.0% 6.2% 24.9% 1.332
Silver 11.8% 3.0% 4.0% 6.4% 25.2% 1.337
Bronze 12.7% 3.0% 4.0% 6.8% 26.5% 1.360
Total 11.9% 3.0% 4.0% 6.5% 25.4% 1.341
Calibration
Age Curve Calibration: Molina calibrated the Plan Adjusted Index Rates to an age 21 rate. Molina estimates the average composite age factor by multiplying the expected age distribution by the age factors. The calibration factor of 0.607 equals the age factor at age 21 divided by the average age factor (1.000 / 1.648). Please note an additional adjustment was implemented in the age calibration process to account for the dependent cap where only the 3 eldest children’s premiums contribute to the family premium.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Age Curve Calibration
Age Member
% Age
Factor Age
Member %
Age Factor
Age Member
% Age
Factor
0 - 14* 0.2% 0.000 31 1.3% 1.159 49 2.4% 1.706
0 - 14 4.8% 0.765 32 1.3% 1.183 50 2.5% 1.786
15 0.6% 0.833 33 1.4% 1.198 51 2.5% 1.865
16 0.6% 0.859 34 1.4% 1.214 52 2.6% 1.952
17 0.6% 0.885 35 1.4% 1.222 53 2.6% 2.040
18 0.8% 0.913 36 1.5% 1.230 54 2.6% 2.135
19 2.2% 0.941 37 1.4% 1.238 55 2.5% 2.230
20 2.4% 0.970 38 1.5% 1.246 56 2.6% 2.333
21 2.3% 1.000 39 1.5% 1.262 57 2.5% 2.437
22 2.0% 1.000 40 1.6% 1.278 58 2.4% 2.548
23 1.8% 1.000 41 1.7% 1.302 59 2.5% 2.603
24 1.6% 1.000 42 1.8% 1.325 60 2.4% 2.714
25 1.5% 1.004 43 1.9% 1.357 61 2.3% 2.810
26 1.8% 1.024 44 2.0% 1.397 62 2.3% 2.873
27 1.6% 1.048 45 2.2% 1.444 63 2.3% 2.952
28 1.5% 1.087 46 2.3% 1.500 64+ 3.5% 3.000
29 1.4% 1.119 47 2.3% 1.563 Total 100.0% 1.648
30 1.3% 1.135 48 2.3% 1.635 Adj Fx 1 /
Total 0.607
*% of membership impacted by the 3 children under age 21 dependent cap.
Molina estimated the average age of the single risk pool to be 41 years of age by multiplying the expected age distribution percentages by the age. Molina assumed an average age of 8 for the Age 0-14 cohort in the average age estimate. Premium rates are based on the attained age as of the coverage effective date and will not be re-rated/adjusted when a birthdate occurs during the year after the coverage starts. Geographic Factor Calibration: Molina applied geographic factors to the index rate in the calculation of region specific rates. The geographic factors are based solely on the provider reimbursement expectations in each region. The calibration factor of 0.990 equals 1.000 divided by the weighted average geographic factor (1.000 / 1.010).
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Geographic Factor Calculation
Geographic Members
Allowed Claims
Geographic
Region Factor
Region 4 2,071 $263.07 1.020
Region 5 1,415 $245.02 0.950
Region 8 79,974 $265.65 1.030
Region 9 12,409 $255.34 0.990
Region 10 96,206 $257.92 1.000
Region 12 8,256 $250.18 0.970
Region 15 2,713 $270.81 1.050
Region 26 2,399 $252.76 0.980
Total 205,444 $257.92 1.010
Calibration 1 / Total 0.990
A table summarizing Molina’s 2017 and 2018 geographic factors is provided below.
Geographic Factor Calculation
Geographic 2017 Factor
2018 Factor Region
Region 4 1.150 1.020
Region 5 1.000 0.950
Region 8 1.020 1.030
Region 9 1.050 0.990
Region 10 1.040 1.000
Region 12 1.100 0.970
Region 15 0.940 1.050
Region 26 0.930 0.980
Consumer Adjusted Premium Rate Development
The Consumer Adjusted Premium Rates are calibrated to an age 21 premium with an area factor of 1.00. Only the allowable rating factors will be applied to the Consumer Adjusted Premium Rates. Molina has included a document identified as “2018 TX Molina Rates” that demonstrates how each allowable consumer level adjustment is applied to the Consumer Adjusted Premium Rates to determine the premiums.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Consumer Adjusted Premium Rates
Product Name Metal Plan Adjusted
Index Rate Age
Calibration Area
Calibration
Consumer Adjusted
Premium Rate
a b c d e f = product (c:e)
Molina Marketplace
Gold 559.43 0.607 0.990 335.95
Silver 520.28 0.607 0.990 312.45
Molina Marketplace
Options Silver 531.85 0.607 0.990 319.39
Molina Marketplace
Choice
Gold 554.42 0.607 0.990 332.95
Silver 534.30 0.607 0.990 320.87
Bronze 351.49 0.607 0.990 211.08
PLAN PRODUCT INFORMATION
AV Metal Values All benefit plans Molina proposes to offer in Texas Marketplace meet ACA essential health benefit (EHB) requirements. Their AV values were calculated exclusively by using HHS’s AV Calculator.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Actuarial Metal Values
Plan ID Product Name Metal FPL Actuarial
Value
45786TX0010001
Molina Marketplace
Gold Base 0.784
45786TX0010002 Silver
Base 0.709
CSR 200-250 0.737
CSR 150-200 0.873
CSR 100-150 0.937
45786TX0040001 Molina
Marketplace Options
Silver
Base 0.711
CSR 200-250 0.740
CSR 150-200 0.876
CSR 100-150 0.947
45786TX0020001
Molina Marketplace
Choice
Gold Base 0.770
45786TX0020002 Silver
Base 0.678
CSR 200-250 0.740
CSR 150-200 0.880
CSR 100-150 0.949
45786TX0020003 Bronze Base 0.625
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
AV Pricing Values
AV pricing value of each plan only includes the allowable modifiers to the index rate, as described in 45 CFR Part 156, §156.80(d)(2). Cost-sharing adjustments ensure that differences due to health status were not included in the adjustment. The modifiers are applied to the index rate as shown in the following table.
Actuarial Value Pricing
Product Name Metal Actuarial
Value Cost Sharing
Adj.
Benefits in Addition to
EHBs
Administration Costs
AV Pricing Value
a b c d e f g = product (c:f)
Molina Marketplace Gold 0.806 1.200 1.000 1.336 1.293
Silver 0.899 1.000 1.000 1.339 1.202
Molina Marketplace Options
Silver 0.919 1.000 1.000 1.338 1.229
Molina Marketplace Choice
Gold 0.799 1.200 1.000 1.336 1.281
Silver 0.923 1.000 1.000 1.338 1.235
Bronze 0.610 0.983 1.000 1.355 0.812
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Membership Projections
Molina is filing Texas Marketplace rates in nine counties representing eight rating regions. Molina considered the number of existing members that would renew with Molina as well as estimating the number of new members likely to purchase a product in Texas Marketplace by applying a market share adjustment, an estimate of what percentage of the Texas Marketplace population would likely select a Molina offering. The market share adjustment took into consideration that Molina members were likely to be lower income and more dependent on subsidies. Molina expects most of new 2018 members to come from other carriers. Molina’s enrollment projections by plan, including cost-sharing reduction eligible plans, were based on the proportion of enrollment enrolled in those plans as of April 2017.
Membership Projections by Region
Region Current
Members Projected Members
Region 4 2,379 2,071
Region 5 1,389 1,415
Region 8 102,024 79,974
Region 9 14,084 12,409
Region 10 115,915 96,206
Region 12 9,872 8,256
Region 15 2,806 2,713
Region 26 2,875 2,399
Total 251,344 205,444
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Membership Projections by Plan
Plan ID Product Name Metal FPL Members
45786TX0010001
Molina Marketplace
Gold Base 1,017
45786TX0010002 Silver Base 0
45786TX0010002 Silver CSR 200-250 0
45786TX0010002 Silver CSR 150-200 6,627
45786TX0010002 Silver CSR 100-150 7,600
45786TX0040001
Molina Marketplace Options
Silver Base 0
45786TX0040001 Silver CSR 200-250 0
45786TX0040001 Silver CSR 150-200 3,035
45786TX0040001 Silver CSR 100-150 9,096
45786TX0020001
Molina Marketplace Choice
Gold Base 2,295
45786TX0020002 Silver Base 0
45786TX0020002 Silver CSR 200-250 0
45786TX0020002 Silver CSR 150-200 28,877
45786TX0020002 Silver CSR 100-150 98,372
45786TX0020003 Bronze Base 48,526
Total 205,444
Molina plans to offer its products in the counties listed by region below.
County List
Geographic County County
Region
Region 4 Jefferson
Region 5 Cameron
Region 8 Collin Dallas
Region 9 El Paso
Region 10 Harris
Region 12 Webb
Region 15 Hidalgo
Region 26 Starr
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Terminated Products
A summary of Molina’s terminated, renewing, and new products is provided in the following table:
Terminated Plans and Mapping
Plan ID Plan Effective
Period Plan
Name Metal Tier
Mapping ------>
New Plan ID
NA NA NA NA NA NA
Renewing Plans
Plan ID Plan Effective
Period Plan
Name Metal Tier
Actuarial Value (AV)
AV (% Chg)
45786TX0040001 Jan 2017 -- Molina Marketplace Options
Silver Silver 0.711 0.6%
45786TX0020001 Jan 2015 -- Molina Marketplace Choice Gold Gold 0.770 -1.9%
45786TX0020002 Jan 2015 -- Molina Marketplace Choice Silver Silver 0.678 -5.8%
45786TX0020003 Jan 2015 -- Molina Marketplace Choice
Bronze Bronze 0.625 1.0%
45786TX0010001 Jan 2014 -- Molina Marketplace Gold Gold 0.784 -1.5%
45786TX0010002 Jan 2014 -- Molina Marketplace Silver Silver 0.709 -1.1%
New Plans
Plan ID Plan Effective
Period Plan
Name Metal Tier
Actuarial Value (AV)
AV (% Chg)
NA NA NA NA NA NA
Plan Type All benefit plans are comprehensive HMO individual products.
Warning Alerts
Warning Alert 1: The Total Allowed Claims (TAC) in row 61 of Worksheet 2, Section III of the URRT generated a warning alert because the claims in Section III were decreased for the amount of payments into the risk adjustment program, in accordance of the instructions. Warning Alert 2: The Allowed Claims PMPM in row 74 of Worksheet 2, Section III of the URRT generated a warning alert for the same reason as the Total Allowed Claims (TAC) in row 61 of Worksheet 2, Section III. Section I instructions state not to reflect payments under the risk
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
adjustment program and Section III instructions state to adjust the claims for risk adjustment transfers. The table below shows the difference between the total allowed claims in Worksheets 1 and 2.
Warning - Total Allowed Claims
Item Location Row
# Description Value
URRT Variance Before Risk Adjustment Consideration
a WS2, III 61 Total Allowed Claims $125,990,923
b WS1, I 16 Allowed Claims $240,522,278
c = b / a - 1 Variance % 91%
URRT Variance After Risk Adjustment Consideration
d WS2, III 61 Total Allowed Claims $125,990,923
e WS2, III 71 Net Amount of Risk Adjustment -$114,330,605
f = d - e Total Allowed Claims with Risk Adjustment $240,321,528
g WS1, I 16 Allowed Claims $240,522,278
h = g / f -1 Variance % 0.1%
MISCELLANEOUS INSTRUCTIONS
Effective Rate Review Information
Not applicable.
Reliance
Not applicable.
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Molina Healthcare of Texas, Inc.
Covered Texas Individual Rate Submission July 28, 2017
Actuarial Certification
I, Evan Swalheim, as a member in good standing with the American Academy of Actuaries, hereby certify, to the best of my knowledge and judgment, the following:
The projected index rate is:
a. In compliance with all applicable State and Federal Statutes and Regulations (45 CFR 156.80 and 147.102),
b. Developed in compliance with the applicable Actuarial Standards of Practice, c. Reasonable in relation to the benefits provided and the population anticipated to be
covered, d. Neither excessive nor deficient.
The index rate and only the allowable modifiers as described in 45 CFR 156.80(d)(1) and 45 CFR 156.80(d)(2) were used to generate plan level rates.
The percent of total premium that represents essential health benefits included in Worksheet 2, Sections III and IV was calculated in accordance with actuarial standards of practice. The geographic rating factors reflect only differences in the costs of delivery and do not include differences for population morbidity by geographic area. The 2018 AV Calculator was used to determine the AV Metal Values shown in Worksheet 2 of the Part I Unified Rate Review Template. Adjustments were made for non-standard plan design elements according to the letter described in the reliance section above.
7/27/2017
Evan Swalheim, ASA, MAAA Date Director, Actuarial Services Molina Healthcare Inc.