CurrentDivision of Financial Regulation, Department of Consumer and Business ServicesPolicy N/A

Pricing Narrative — PacificSource small group plan actuarial methods and plan pricing exhibits

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Describes the actuarial methods, assumptions, and plan pricing exhibits used to determine PacificSource Health Plans' Oregon small group plan relativities and proposed rates.

Policy Summary

PayerDivision of Financial Regulation, Department of Consumer and Business Services

PolicyPricing Narrative — PacificSource small group plan actuarial methods and plan pricing exhibits

Policy CodePolicy N/A

Change TypeInformational (no material changes)

Effective DateJul 1, 2008

Next Review Date

Key ActionUse the described actuarial methods and pricing exhibits to calculate plan relativities and proposed small group rates.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

2006experience year used for pricing

7/1/08effective/trend target date

$279.29Example Plan Cost PMPM (Basic Plan)

2006→7/1/08data vintage / trend basis

Plan pricing & coverage outputs

Plan pricing outputs

Plan relativity and pricing results produced by the cost model

Plan factors are calculated by dividing the total expected claim costs for each plan design by the expected claim costs for the Preferred 25/200D plan.

Calculated from cost model outputs.

Basic Plan — Plan Cost PMPM: $279.29; Projected Claims Cost: $228.19; Plan Cost Share PMPM: $203.06; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $8.38; Deductible Adjustment: $0.00; OOP Adjustment: $25.14.

Values from BASIC PLAN pricing exhibit.

Preferred CoDeduct Value 300+35/80% — Plan Cost PMPM: $278.04; Projected Claims Cost: $226.98; Plan Cost Share PMPM: $230.56; Deductible Adjustment: ($13.85); OOP Adjustment: $10.27; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $8.34.

Values from Preferred CoDeduct 300+35/80% exhibit.

Plan pricing breakdowns

Per-plan financial components and PMPMs (examples):

Preferred CoDeduct Value 7500+35/80% — Plan Cost PMPM: $158.28; Projected Claims Cost: $110.81; Plan Cost Share PMPM: $200.04; Deductible Adjustment: ($91.65); OOP Adjustment: $2.41; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $4.75.

Values from Preferred CoDeduct 7500+35/80% exhibit.

Preferred CoDeduct Value 300+35/70% — Plan Cost PMPM: $256.66; Projected Claims Cost: $206.24; Plan Cost Share PMPM: $202.79; Deductible Adjustment: ($12.54); OOP Adjustment: $15.99; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $7.70.

Values from Preferred CoDeduct 300+35/70% exhibit.

Preferred CoDeduct Value 500+35/70% — Plan Cost PMPM: $245.54; Projected Claims Cost: $195.46; Plan Cost Share PMPM: $198.78; Deductible Adjustment: ($18.59); OOP Adjustment: $15.26; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $7.37.

Values from Preferred CoDeduct 500+35/70% exhibit.

Preferred CoDeduct Value 750+35/70% — Plan Cost PMPM: $231.65; Projected Claims Cost: $181.98; Plan Cost Share PMPM: $194.77; Deductible Adjustment: ($24.72); OOP Adjustment: $11.92; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $6.95.

Values from Preferred CoDeduct 750+35/70% exhibit.

Preferred CoDeduct Value 1000+35/70% — Plan Cost PMPM: $220.51; Projected Claims Cost: $171.17; Plan Cost Share PMPM: $190.76; Deductible Adjustment: ($29.73); OOP Adjustment: $10.14; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $6.62.

Values from Preferred CoDeduct 1000+35/70% exhibit.

Preferred CoDeduct Value 1500+35/70% — Plan Cost PMPM: $207.52; Projected Claims Cost: $158.57; Plan Cost Share PMPM: $186.74; Deductible Adjustment: ($37.77); OOP Adjustment: $9.60; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $6.23.

Values from Preferred CoDeduct 1500+35/70% exhibit.

Preferred CoDeduct Value 2000+35/70% — Plan Cost PMPM: $194.62; Projected Claims Cost: $146.06; Plan Cost Share PMPM: $182.73; Deductible Adjustment: ($43.93); OOP Adjustment: $7.25; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $5.84.

Values from Preferred CoDeduct 2000+35/70% exhibit.

Preferred CoDeduct Value 2500+35/70% and 3000+35/70% — examples include Plan Cost PMPMs of $186.05 and $174.53 respectively with associated Projected Claims Cost, Plan Cost Share PMPM, deductible and OOP adjustments and standard administration/portability/commissions/margin components.

Values from Preferred CoDeduct 2500+35/70% and 3000+35/70% exhibits.

Preferred CoDeduct Value 5000+35/70% — Plan Cost PMPM: $159.32; Projected Claims Cost: $111.82; Plan Cost Share PMPM: $176.05; Deductible Adjustment: ($68.55); OOP Adjustment: $4.32; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $4.78.

Values from Preferred CoDeduct 5000+35/70% exhibit.

Pricing excerpt — no coverage rules

Pricing and cost composition entries (partial); no explicit coverage criteria present in this excerpt.

Plan Cost Share PMPM: $193.52; Deductible Adjustment: ($74.36); OOP Adjustment: $2.69; Projected Claims Cost: $121.85 (71.82% of Plan Cost); Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $5.09 (3.00%); Plan Cost PMPM: $169.66.

Values and percentages from the partial pricing excerpt.

Exhibit mapping and service-category notation shown (1 = year (Trended); 3 = Cost Share Per Event; 4 = PMPM) with service categories listed (Hospital inpatient, Surgery, Medical Delivery, etc.) but most per-event and PMPM cells are empty or placeholders in this fragment.

Exhibit column mapping and service category labels from the partial exhibit.

Plan pricing components (partial)

Pricing and PMPM component details for specific plan designs (examples shown):

Example plan — Plan Cost Share PMPM: $194.61; Deductible Adjustment: ($88.91); OOP Adjustment: $2.38; Projected Claims Cost: $108.08 (69.52%); Administration: $22.50 (14.47%); Portability/OMIP: $5.90 (3.80%); Commissions: $14.32 (9.21%); Margin: $4.66 (3.00%); Plan Cost PMPM: $155.47.

Values from the example pricing component exhibit.

Preferred CoDeduct Value 300+50/70% — Plan Cost PMPM: $250.94; Projected Claims Cost: $200.69; Plan Cost Share PMPM: $196.78; Deductible Adjustment: ($11.92); OOP Adjustment: $15.83; Administration: $22.50; Portability/OMIP: $5.90; Commissions: $14.32; Margin: $7.53 (3.00%).

Values from Preferred CoDeduct Value 300+50/70% exhibit.

Service category pricing (no coverage criteria provided)

Service category rows with per-event and PMPM placeholders (no explicit coverage rules in this fragment).

Exhibit lists service categories (Hospital inpatient, Surgery, Medical Delivery, Delivery Other, Other Hospital Inpatient Total, Hospital Outpatient, Physician, Physician Office Visits, Outpatient ER, ER Surgery, etc.) with column definitions (1 = year (Trended); 2 = (Trended) Event; 3 = Event Per Event; 4 = PMPM).

Service-category labels and column mapping are shown without populated procedure codes or consistent per-event/PMPM values.

Pricing exhibit entries

Pricing and cost-share table entries (partial and repeated values) for multiple service categories including hospital inpatient, hospital outpatient, ER, surgery, physician office visits, ambulance, and others. Many table cells are empty except for recurring value entries.

Repeated unit values appear across service-category rows: examples include $53.92 for Surgery/Other Hospital Outpatient totals and $58.88 for Hospital Inpatient/Hospital Outpatient totals.

Multiple exhibit rows show the same unit values repeated in different cells.

Physician/office/ambulance rows frequently use repeated unit values such as $69.58 for Physician Office Visits and related physician totals across many cells.

Document contains recurring physician/ambulance unit values.

Ambulance and Other Ambulance DME rows are present in the exhibits but contain no explicit CPT/HCPCS codes or authorization rules; cells are mostly placeholders or empty.

Ambulance/DME entries appear without procedure codes or authorization guidance.

Other recurring numeric examples from exhibits include $71.02 and $74.07 appearing in physician-related totals and other service-category totals across the pricing tables.

Several unit values are reused in the exhibits as placeholders for per-event or PMPM amounts.

Codes, unit costs, and model inputs

rate/model inputsmixed

No CPT/HCPCS/ICD-10 codes provided in this excerpt.

Unit cost entriesmixed

Repeated numeric unit value $74.07 used in physician/other physician totals across multiple service lines

Ambulance / Other Ambulance DME (entries present but no codes listed)mixed

No codes listed

Service category mapping (placeholders)mixed

Service category placeholders and numeric labels appear in the exhibit (hospital inpatient/outpatient, surgery, physician, etc.) but without populated code values.

Service-category pricing (partial)mixed

Multiple service-category entries (Hospital Outpatient, Physician, Surgery, ER, Ambulance) with repeated dollar amounts such as $56.12 and $69.92 in the partial exhibit.

service-category pricing cellsmixed

Pricing exhibit lists many service categories and numeric cell values but no explicit CPT/HCPCS/ICD codes in these pages

Service category pricing (codes not specified)mixed

No specific CPT/HCPCS/ICD-10/NDC codes are present in this fragment; only aggregated service category labels and dollar amounts.

Pricing unit values (no procedure codes in this section)mixed

Document contains numerous repeated numeric unit values (e.g., $69.58, $53.92, $58.88) mapped to service categories but no explicit CPT/HCPCS/ICD codes in this section.

Service category price linesmixed

Various service category totals and cell prices (e.g., Hospital Inpatient Total, Hospital Outpatient, Surgery Other Hospital Outpatient Total, Physician Office Visits, Ambulance)

Preferred 2500+50/70% componentsmixed

Plan cost components (Projected Claims Cost, Administration, Portability/OMIP, Commissions, Margin) with percentages and dollar amounts for Preferred CoDeduct Value 2500+50/70%

Preferred 5000+50/70% componentsmixed

Plan cost components for Preferred CoDeduct Value 5000+50/70%

BASIC PLAN componentsmixed

BASIC PLAN cost components including Plan Cost Share PMPM, Deductible Adjustment, OOP Adjustment, Projected Claims Cost, Administration, Portability/OMIP, Commissions, and Margin

Deductible/OOP valuation methods

Valuation methodUses cumulative probability distributions (CPDs) to adjust gross member cost-sharing and calculate the percent of expected claim costs below the deductible and above coinsurance limits, then applies those percentages to derive net member cost-sharing.

Gross vs. net member cost-sharingGross member cost-sharing calculated assuming no deductible or coinsurance limit; net member cost-sharing equals gross cost-sharing adjusted by percentages from CPDs.

Deductible valuationDeductible valued as percent of expected claim costs below the deductible multiplied by expected net claim costs (claims less copay and coinsurance).

Coinsurance limit adjustmentCalculated as percentage of claims expected to be above the coinsurance limit multiplied by gross member cost-sharing.

Service-category CPDsThree sets of CPDs used to reflect differences where certain service categories (e.g., medical services vs. prescription drugs) are excluded from deductibles or coinsurance limits.

Projected Claims Cost (example)

Projected Claims Cost (example)$124.76 PMPM

Associated Plan Cost Share PMPM$198.93

Plan Cost PMPM (derived)$172.66

Margin percentage used in PMPM

Margin percentage used in PMPM3.00%

Margin dollar examples$5.18; $4.78; $7.82 (appears across exhibits)

Margin applied to plansShown consistently as a 3.00% loading in plan exhibits.

Projected claims percent

Projected claims percent71.82%

Projected Claims Cost (PMPM) shown alongside$121.85

Plan Cost PMPM contextPlan Cost PMPM: $169.66 (exhibit showing composition)

Plan Cost Share PMPM

Plan Cost Share PMPM (example)$194.61

Other Plan Cost Share PMPMs shown$196.78; $192.89 (different exhibits)

Used to derive Plan Cost PMPM after adjustmentsPlan Cost PMPM values shown in exhibits are derived from Plan Cost Share PMPM with deductible and OOP adjustments applied.

Projected Claims Cost

Projected Claims Cost (Preferred CoDeduct 300+50/70%)$200.69

Projected claims percent for that plan79.98%

Plan Cost PMPM for that plan$250.94

Plan cost share PMPM

Plan cost share PMPM$192.89

Context — exhibit adjustmentsDeductible Adjustment: ($17.68); OOP Adjustment: $15.10; Projected Claims Cost: $190.32 (79.22%)

Resulting Plan Cost PMPM$240.24

Deductible adjustment

Deductible adjustment($17.68)

Applied to Plan Cost Share PMPMShown as the deductible adjustment line in the exhibit used to derive Projected Claims Cost and Plan Cost PMPM.

Appears alongside OOP adjustmentExhibit shows both deductible and OOP adjustments together when deriving PMPMs.

OOP Adjustment

OOP Adjustment (example)$15.10

Other exhibited OOP adjustments$15.83; $9.82; $8.02 (appear in other plan exhibits)

Role in PMPM derivationOOP Adjustment is applied with the deductible adjustment to convert Plan Cost Share PMPM into Projected Claims Cost and final Plan Cost PMPM.

Plan Cost PMPM

Plan Cost PMPM (example)$226.77

Other Plan Cost PMPM examples$240.24; $250.94 (from other plan exhibits)

Represents total plan cost per member per month after adjustments and loadingPlan Cost PMPM shown in exhibits includes administration, portability/OMIP, commissions, margin and projected claims cost.

Projected claims cost share

Projected claims cost share — examples77.22%; 76.00%; 74.62%; 73.60%

Associated Projected Claims Cost PMPMs$166.78; $154.62; $142.48; $134.38 (appear in respective exhibits)

Used to express claims portion of Plan Cost PMPMThese percentages reflect the percent of the Plan Cost PMPM attributable to projected claims cost in the exhibits.

Provider-impact highlights and billing notes

Note

Actuarial methods — informational

Describes the actuarial methods and assumptions used to determine plan relativities; this excerpt contains no provider prior authorization or billing requirements.

Billing Rule

Preferred CoDeduct 1500+35/80% pricing — exhibit

Exhibit lists plan PMPM and component breakdown for Preferred CoDeduct Value 1500+35/80% (Plan Cost PMPM $226.14; Projected Claims Cost $176.63; Plan Cost Share PMPM $212.37).

Plan Cost Share PMPM: $212.37
Deductible Adjustment: ($41.96)
OOP Adjustment: $6.22
Projected Claims Cost: $176.63
Plan Cost PMPM: $226.14

Billing Rule

Preferred CoDeduct 2000+35/80% pricing — exhibit

Exhibit lists plan PMPM and component breakdown for Preferred CoDeduct Value 2000+35/80% (Plan Cost PMPM $212.05; Projected Claims Cost $162.97; Plan Cost Share PMPM $207.82).

Plan Cost Share PMPM: $207.82
Deductible Adjustment: ($48.85)
OOP Adjustment: $4.01
Projected Claims Cost: $162.97
Plan Cost PMPM: $212.05

Billing Rule

Preferred CoDeduct 2500/3000+35/80% pricing — exhibits

Exhibit lists plan PMPM and component breakdowns for Preferred CoDeduct Values 2500+35/80% and 3000+35/80% including Plan Cost PMPMs $203.46 and $190.56 respectively.

Preferred 2500+35/80% — Plan Cost Share PMPM: $207.76; Deductible Adjustment: ($56.32); OOP Adjustment: $3.20; Projected Claims Cost: $154.63; Plan Cost PMPM: $203.46
Preferred 3000+35/80% — Plan Cost Share PMPM: $198.75; Deductible Adjustment: ($59.63); OOP Adjustment: $3.00; Projected Claims Cost: $142.12; Plan Cost PMPM: $190.56

Documentation Required

Ambulance / Other Ambulance DME — entries without rules

Pricing exhibits include lines referencing Ambulance and Other Ambulance DME but do not provide authorization, coding, or billing rules for these items in this excerpt.

Text shows repeated unit values mapped to Ambulance and Other Ambulance DME entries but no CPT/HCPCS codes or prior authorization instructions are present.

Billing Rule

Plan pricing exhibits — PMPM component breakdown

Plan exhibits present sample PMPM component breakdowns (Plan Cost Share PMPM, Deductible Adjustment, OOP Adjustment, Projected Claims Cost, Administration, Portability/OMIP, Commissions, Margin) used to derive Plan Cost PMPM for Preferred plans.

Example components listed: Plan Cost Share PMPM, Deductible Adjustment, OOP Adjustment, Projected Claims Cost, Administration ($22.50), Portability/OMIP, Commissions, Margin (3.00%)
Example shown for Preferred CoDeduct Value 5000+35/70% with Plan Cost PMPM $159.32.

Billing Rule

Pricing line items (partial) — service categories listed

Pricing exhibits contain numerous service-category line items and recurring numeric values (e.g., hospital outpatient, physician, surgery, ER, ambulance) but provide no provider action or prior authorization rules in these fragments.

Multiple 'Other Hospital Outpatient Total' entries show recurring value $56.12 in the exhibit.
No CPT/HCPCS/ICD codes or authorization instructions are supplied in these lines.

Billing Rule

Exhibit fragment — no provider billing action

Fragment labeled 'billing_rule' contains no explicit provider billing instructions or codes; it is an internal exhibit artifact without actionable billing rules for providers in this excerpt.

Billing Rule

Pricing exhibit — service categories (no auth rules)

Service category rows and placeholders for per-event and PMPM pricing are listed (e.g., Hospital inpatient, Surgery, Medical Delivery) but this section includes no authorization or prior authorization rules for providers.

Column mapping shown (1 = year (Trended); 4 = PMPM) and service category placeholders are present.
No coverage criteria, prior authorization steps, or billing codes are provided in this fragment.

Documentation Required

Pricing basis and plan identifier — data vintage

Pricing basis and plan identifier are shown: pricing is based on 2006 Calendar Year experience trended to a 7/1/08 effective date and includes plan identifiers such as Preferred CoDeduct Value 1000+50/70%.

Pricing based on 2006 Calendar Year experience trended to 7/1/08 effective date
Example plan identifier: Preferred CoDeduct Value 1000+50/70%

Billing Rule

Pricing line items — numeric totals shown

Pricing exhibit lists numerous line items with repeated numeric unit values for service categories (examples include $58.88 and other per-category totals), but contains no provider billing procedures or authorization instructions in this excerpt.

Other Hospital Inpatient Total entries show $58.88 in multiple cells.
Exhibit provides numeric totals for inpatient/outpatient lines but no procedural guidance for providers.

Billing Rule

Preferred CoDeduct Value 2500+50/70% pricing — exhibit

Exhibit lists plan-level PMPM and component breakdowns for Preferred CoDeduct Value 2500+50/70% (Plan Cost PMPM $182.58; Projected Claims Cost $134.38; Plan Cost Share PMPM $177.25).

Plan Cost Share PMPM: $177.25
Deductible Adjustment: (S48.43)
OOP Adjustment: $5.57
Projected Claims Cost: $134.38
Plan Cost PMPM: $182.58

Billing Rule

Preferred CoDeduct Value 3000+50/70% pricing — exhibit

Exhibit lists plan-level PMPM and component breakdowns for Preferred CoDeduct Value 3000+50/70% (Plan Cost PMPM $171.42; Projected Claims Cost $123.55; Plan Cost Share PMPM $169.71).

Plan Cost Share PMPM: $169.71
Deductible Adjustment: ($51.27)
OOP Adjustment: $5.11
Projected Claims Cost: $123.55
Plan Cost PMPM: $171.42

Billing Rule

Preferred CoDeduct Value 5000+50/70% pricing — exhibit

Exhibit lists plan-level PMPM and component breakdowns for Preferred CoDeduct Value 5000+50/70% (Plan Cost PMPM $156.45; Projected Claims Cost $109.04; Plan Cost Share PMPM $170.87).

Plan Cost Share PMPM: $170.87
Deductible Adjustment: ($66.10)
OOP Adjustment: $4.27
Projected Claims Cost: $109.04
Plan Cost PMPM: $156.45

Billing Rule

Preferred CoDeduct Value 7500+50/70% pricing — exhibit

Exhibit lists plan-level PMPM and component breakdowns for Preferred CoDeduct Value 7500+50/70% (Plan Cost PMPM $143.68; Projected Claims Cost $96.65; Plan Cost Share PMPM $171.85).

Plan Cost Share PMPM: $171.85
Deductible Adjustment: ($78.78)
OOP Adjustment: $3.58
Projected Claims Cost: $96.65
Plan Cost PMPM: $143.68

Billing Rule

BASIC PLAN pricing — exhibit

Pricing exhibit lists BASIC PLAN PMPM and its component breakdown (Plan Cost PMPM $279.29; Projected Claims Cost $228.19; Plan Cost Share PMPM $203.06).

Plan Cost Share PMPM: $203.06
Deductible Adjustment: $0.00
OOP Adjustment: $25.14
Projected Claims Cost: $228.19
Plan Cost PMPM: $279.29

Key terms and exhibit notes

Cost model

Cost modelA proprietary actuarial cost model using PacificSource claim data to quantify relative value between benefit plans by adjusting for provider contracting and plan selection patterns.

PurposeDesigned to determine plan relativity factors and expected costs by plan design.

InputsUtilization, unit costs, anticipated provider contract changes, and member cost-sharing provisions.

Member cost sharing

Member cost sharing (gross/net)Gross member cost-sharing computed assuming no deductible or coinsurance limit; net member cost-sharing equals gross adjusted by expected percentages from CPDs.

Copays & coinsurance valuationFor coinsurance, used average unit cost multiplied by in-network coinsurance rate; for copays, used per-service copay amount.

Adjustment driversPercent of total claim costs below deductible and above coinsurance limit derived from CPDs are applied to gross cost-sharing.

Exhibit column mapping

Exhibit column mappingService category exhibit columns: 1 = year (Trended); 2 = (Trended) Event; 3 = Event Per Event; 4 = PMPM; (columns 5–9 present but not labeled in excerpt).

Rows includedService category rows include Hospital Inpatient, Surgery, Medical, etc., with per-event and PMPM placeholders.

PurposeColumn mapping explains how unit/event values and PMPMs are presented in the pricing exhibits.

Plan Cost PMPM

Plan Cost PMPM (definition)Total plan cost per member per month after adjustments and loading (as presented in the exhibits).

Examples in exhibits$226.77; $240.24; $250.94 are shown as Plan Cost PMPMs for different plans.

Components includedIncludes projected claims cost, administration, portability/OMIP, commissions and margin.

Projected Claims Cost

Projected Claims Cost (definition)Estimated claims cost component of the PMPM expressed in dollars and percent of plan cost (shown on exhibits).

Exhibit examples$124.76 (72.26%); $121.85 (71.82%); $200.69 (79.98%) correspond to projected claims cost lines in exhibits.

RoleRepresents the claims portion used to assess plan relativity and derive final PMPM.

Plan Cost PMPM (exhibit description)

Plan Cost PMPM (exhibit role)Total plan cost per member per month after adjustments and loading (presented in exhibits and used for pricing comparisons).

Shown valuesExamples include $226.77, $240.24, $250.94 across different plan exhibits.

DerivationDerived from Plan Cost Share PMPM after applying deductible and OOP adjustments, then adding admin, OMIP, commissions and margin.

Projected Claims Cost (exhibit component)

Projected Claims Cost (component of PMPM)The dollar amount and percent of PMPM attributed to expected claims, shown on each plan exhibit.

Exhibit instancesDisplayed as lines such as Projected Claims Cost $124.76 (72.26%); $110.81 (70.01%); $111.82 (70.19%).

UseUsed to express the claims portion when analyzing plan cost composition and relativity.

Preferred CoDeduct Value 7500+50/80%

Preferred CoDeduct Value 7500+50/80%Plan identifier appearing in exhibits (Preferred CoDeduct Value 7500+50/80%).

ContextListed among multiple Preferred CoDeduct plan designs in the pricing exhibits.

Pricing basisExhibits for similar plan identifiers are trended from 2006 to 7/1/08 effective date.

Plan Cost Share PMPM

Plan Cost Share PMPM (term)Plan Cost Share PMPM is the per-member-per-month cost share amount for the plan (shown on exhibits).

Examples$176.05; $194.61; $192.89 shown as Plan Cost Share PMPMs for different plans.

Role in calculationsUsed as the starting point before deductible and OOP adjustments to derive projected claims cost and final Plan Cost PMPM.

Plan Cost Share PMPM (example)

Plan Cost Share PMPM (exhibit example)Shown as the plan-level per-member-per-month cost share (e.g., $194.61 in an exhibit).

Adjustment linesExhibits list Deductible Adjustment and OOP Adjustment below the Plan Cost Share PMPM.

Used to derive Projected Claims CostAfter adjustments, Projected Claims Cost line is presented as part of the plan composition.

Projected Claims Cost (exhibit repeat)

Projected Claims Cost (exhibit repeat)Projected Claims Cost appears consistently as the claims component line on plan exhibits (e.g., $200.69; $124.76; $121.85).

Percentages shownAssociated percentages (e.g., 79.98%, 72.26%, 71.82%) indicate percent of Plan Cost PMPM attributable to claims.

FunctionKey input for plan relativity and PMPM derivation across exhibits.

Plan name / design

Plan name / designPreferred CoDeduct Value 750+50/70% (example plan name appearing in exhibits).

Series of Preferred CoDeduct plansMultiple Preferred CoDeduct plan identifiers (e.g., 2500+50/70%, 3000+50/70%) appear in the pricing exhibits.

Used in relativity calculationsPlan names identify the design whose PMPM components and adjustments are shown for pricing comparisons.

Plan Cost PMPM

Plan Cost PMPM (term)Plan Cost PMPM — total plan cost per member per month after adjustments and loading (exhibit term).

Exhibit examples$226.77; $240.24; $250.94 shown in different plan exhibits.

InterpretationRepresents final priced PMPM used for rate filing and plan relativity comparisons.

Projected Claims Cost

Projected Claims Cost (definition)Component of PMPM representing expected claims (dollar and percent) as shown in exhibits.

Exhibit examples$200.69 (79.98%); $124.76 (72.26%); $121.85 (71.82%).

Used forAssessing claim portion of the plan PMPM and informing plan relativity.

Pricing basis / effective date

Pricing basis / effective datePricing based on 2006 Calendar Year experience trended to 7/1/08 effective date.

Used across exhibitsThis trend basis is stated on multiple plan exhibits in the filing.

ImplicationAll plan PMPMs and component projections are presented on a common trended basis for the 7/1/08 effective date.

Plan cost components

Plan cost components — summaryPlan exhibits list Plan Cost Share PMPM, Deductible Adjustment, OOP Adjustment, Projected Claims Cost, Administration, Portability/OMIP, Commissions and Margin.

Adjustment flowPlan Cost Share PMPM minus Deductible Adjustment plus OOP Adjustment yields Projected Claims Cost, then admin/OMIP/commissions/margin are added to reach Plan Cost PMPM.

Exhibit percentagesAdministration typically shown as $22.50 with varying percent contributions; margin consistently 3.00%.

Plan Cost Share PMPM

Plan Cost Share PMPM (term)Monthly per-member plan cost share amount shown in exhibits (starting point for adjustments).

Exhibit examples$177.25; $185.10; $192.89 appear as Plan Cost Share PMPMs depending on plan design.

Role in derivationUsed with Deductible and OOP adjustments to derive Projected Claims Cost.

Projected Claims Cost

Projected Claims Cost (exhibit role)Projected Claims Cost is the component of plan PMPM representing expected claims (expressed in $ and % of PMPM).

Exhibit instancesShown as $200.69 (79.98%), $124.76 (72.26%), $121.85 (71.82%) in various exhibits.

ImportanceKey input for plan relativity calculations and comparison of plan designs.

OOP Adjustment

OOP Adjustment (definition)Out-of-pocket adjustment applied to Plan Cost PMPM as shown in the exhibits (e.g., $15.10; $15.83; $9.82).

FunctionCombined with deductible adjustment to convert Plan Cost Share PMPM into Projected Claims Cost.

Exhibit presentationListed as a separate line item beneath Plan Cost Share PMPM in pricing exhibits.

Policy Summary

PayerDivision of Financial Regulation, Department of Consumer and Business Services

PolicyPricing Narrative — PacificSource small group plan actuarial methods and plan pricing exhibits

Policy CodePolicy N/A

Change TypeInformational (no material changes)

Effective DateJul 1, 2008

Next Review Date

Key ActionUse the described actuarial methods and pricing exhibits to calculate plan relativities and proposed small group rates.

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OpenPayer is powered by Trek Health's payer performance platform. Trek continuously ingests, validates, and normalizes Transparency in Coverage data alongside payer policies and other commercial payer data to create a structured payer intelligence foundation. OpenPayer uses this foundation to deliver personalized search results, dynamically generated policy pages, and tailored policy monitoring based on each user's payers, specialties, billing codes, and areas of interest. The same intelligence powers broader payer performance workflows, including reimbursement benchmarking, contract evaluation, payer negotiations, and financial decision-making.