Health Insurance Department releases operating results

The Health Insurance Department today released operating results and performance measures for the Health Insurance Plan (HIP), the FutureCare Plan (FutureCare) the Mutual Reinsurance Fund (MRF) and the Government Subsidies Program.  Summary details are below:

HIP Operating Results

• Premiums: As at May 1, 2013, the monthly HIP premium rate for persons on HIP was $390.  This was the same as the previous year.  The HIP premium for fiscal year 2014/15 will be announced in the coming weeks.

• Headcount: At March 31, 2013 there were approximately 3,533 persons insured on HIP as compared to the previous year’s figure of 3,283.  This is an increase of 250 persons or 8%.

• Revenues: HIP premiums earned for fiscal 2012/13 were $14.1 million.  This represents a 1% decrease in premiums received of less than $100,000.

• Claims: Claims incurred in 2012/13 totaled $14.5 million.  This was less than a 6.5% decrease in claims paid compared to fiscal 2011/12.  HIP’s loss ratio was approximately 102.6% in fiscal 2012/13.

• Expenses: Administrative expenses were $1.9 million in fiscal 2012/13, which was more than a 25% decrease when compared to the prior year’s expenses of $2.6M.  This decrease was a result of a change in cost accounting methodology as expenses were again applied to the Mutual Reinsurance Fund.  HIP’s administrative expense ratio was 13.6% for the fiscal 2012/13 period.

FutureCare Operating Results

• Premiums: On May 1, 2013, the FutureCare premium for all persons was merged into a single premium rate of $440 per person per month.  The FutureCare premium for fiscal year 2014/15 will also be announced in the coming weeks.

• Headcount: FutureCare’s insured headcount was approximately 3,189 at March 31, 2013, which was an increase of 300 persons or 10% as compared to the headcount of 2,893 at March 31, 2012.

• Revenues: FutureCare’s premiums for fiscal 2012/13, its fourth year of operation, exceeded $16 million, which was an increase of approximately $1.7 million or 12% over fiscal 2011/12.

• Claims: FutureCare claims for fiscal year 2012/13 were $10 million, which represented an increase of approximately $600,000, or 6.3% when compared to the previous year.  FutureCare’s loss ratio was 62.6% in fiscal 2012/13.

• Expenses: FutureCare absorbed administrative expenses of approximately $1.3 million, which was roughly a $637,000 decrease.  That was nearly a 25% decrease in expenses when compared to the previous year.  FutureCare’s administrative expense ratio was 12.2% for the fiscal 2012/13 period.

MRF Operating Results

• Premiums: On April 1, 2013 the MRF premium increased by $8.69 per month to $43.57.  This was an increase of roughly 25% compared to the fiscal 2012/13 premium.

• Revenues: Premiums received by the Mutual Re-insurance Fund for the year ended March 31, 2013 totaled $20.3 million.  This is a significant increase of $4.4 million or 28% compared to the prior year.

• Claims: MRF claims paid in fiscal 2012/13 were $18.4 million, which was more than a $1.2 million increase compared to the previous year or approximately 7%.  The MRF’s loss ratio was 91% in fiscal 2012/13.

• Expenses: Administrative expenses were again allocated to the MRF for the 2012/13 fiscal year after a three year hiatus.  The Department allocated $1.3 million in administrative expenses to the MRF for this period.

Subsidy Operating Results

• Claims: For the year ended March 31, 2013, the Department processed claims under the Subsidy Program totaling $104.5 million.  This was a 1% decrease in claims at the Bermuda Hospitals Board as compared to in fiscal 2011/12.

For the fiscal 2012/13 year for all the health insurance products managed by the Department the median (average) turn-around-time for claims adjudication was 23 days.  The trend for the current 2013/14 fiscal year is that median claims turn-around-time improved to 20 days.  On a Consolidated Basis, the Health Insurance Department had total assets of $21.5 million as at March 31, 2013.  Total Premium Revenue on a consolidated basis for the period ended March 31, 2013 was $54.5 million, while total claims for the period, including the Government subsidies were approximately $155 million.  On a consolidated basis for all funds including the subsidies, the Department had an Administrative expense ratio of 4%.

Further information is available at: www.hip.gov.bm.