Analyzing Health Insurance Plans

When To Use

• Comparing multiple health insurance plan options (employer group, individual market, or Medicare Advantage)
• Evaluating actuarial value and metal-tier classification accuracy
• Projecting out-of-pocket costs under different utilization scenarios
• Assessing network adequacy for a specific population or geographic area
• Reviewing plan design changes for renewal or repricing cycles
• Analyzing reinsurance attachment points and stop-loss adequacy relative to plan exposure

Inputs To Gather

• Plan documents: Summary of Benefits and Coverage (SBC), Schedule of Benefits, Certificate of Coverage, Evidence of Coverage
• Rate filings: Premium rates by tier (single, employee+spouse, family), age-banding tables if applicable
• Network data: Provider directory or network ID, in-network vs. out-of-network reimbursement schedules, any tiered or narrow network designations
• Claims history (if available): Aggregate paid claims, large-claimant data, utilization rates by service category
• Census data: Member demographics, enrollment counts by tier, geographic distribution
• Formulary: Drug tier structure, prior authorization requirements, specialty drug handling
• Reinsurance/stop-loss terms: Specific and aggregate attachment points, lasering exclusions, contract period (paid vs. incurred basis)
• Comparison context: Benchmark plans, prior-year plan design, or competing carrier quotes

Workflow

1. Classify the plan structure

   • Identify plan type: HMO, PPO, EPO, POS, HDHP/HSA-eligible, or hybrid
   • Confirm metal tier (Bronze/Silver/Gold/Platinum) or equivalent actuarial value band
   • Note any non-standard design features: reference-based pricing, direct primary care carve-outs, or centers-of-excellence requirements

2. Calculate actuarial value

   • Map cost-sharing parameters: deductible, coinsurance, copays, out-of-pocket maximum (OOPM)
   • Apply standard continuance tables or the CMS AV Calculator methodology to estimate the plan's share of total allowed costs [VERIFY: confirm which AV calculator version or methodology is required for the filing year]
   • Flag deviations from de minimis AV ranges for the stated metal tier (±2 percentage points under ACA rules) [VERIFY: state-specific AV requirements may differ]

3. Analyze network adequacy

   • Check provider-to-member ratios for primary care, specialty, and facility categories against applicable state or CMS standards [VERIFY: network adequacy standards vary by state and market segment]
   • Identify geographic access gaps using drive-time/distance thresholds
   • Assess out-of-network exposure: balance billing protections, surprise billing act applicability, reference pricing methodology

4. Project member cost exposure

   • Model total cost of care under low, moderate, and high utilization scenarios
   • Calculate effective member cost share: premiums + expected out-of-pocket spend per scenario
   • Compare across plans using equivalent annual cost metrics (premium + expected OOP at each utilization level)
   • For HDHP plans, factor in HSA/HRA employer contributions and tax-advantage value

5. Evaluate pharmacy benefits

   • Map formulary tiers and typical member cost for high-utilization drug categories
   • Identify specialty drug exposure and accumulator/maximizer program impact on OOPM
   • Note step therapy, prior authorization, and quantity limit protocols

6. Assess risk transfer and reinsurance

   • Review specific stop-loss attachment points relative to historical large-claimant frequency
   • Evaluate aggregate stop-loss corridor and expected claims variability
   • Flag any lasered members or excluded conditions and quantify retained risk
   • For self-funded plans, assess claims-fund adequacy and IBNR reserves

7. Compile comparative analysis

   • Build side-by-side comparison matrix covering: premiums, cost sharing, AV, network breadth, pharmacy, and risk transfer
   • Rank plans on total effective cost, network quality, and financial risk exposure
   • Highlight material trade-offs (e.g., lower premium but narrow network, high deductible offset by HSA funding)

Output

• Plan Analysis Summary: One-page overview with plan classification, AV calculation result, and key cost metrics
• Cost Projection Table: Low/moderate/high utilization scenario modeling with annual premium + OOP totals per plan
• Network Adequacy Assessment: Provider ratio analysis, geographic access findings, and out-of-network risk notes
• Pharmacy Benefit Summary: Formulary tier structure, specialty drug exposure, and accumulator program flags
• Reinsurance/Stop-Loss Review (if applicable): Attachment point adequacy, retained risk quantification, and lasering impact
• Comparative Matrix: Side-by-side plan ranking with trade-off commentary
• Flagged Items: Any data gaps, assumptions made, or items requiring [VERIFY] follow-up

Quality Checks

• Confirm all cost-sharing parameters (deductible, coinsurance, copay, OOPM) are captured for both in-network and out-of-network tiers
• Verify AV calculations use the correct methodology and plan year assumptions
• Ensure utilization scenarios reflect realistic claims distributions (not just arbitrary multiples)
• Check that premium comparisons use consistent contribution assumptions (gross vs. net of employer subsidy)
• Validate network data is current — provider directories can be 60–90 days stale
• Confirm reinsurance terms match the contract period and claims basis (paid vs. incurred)
• Flag any state-mandated benefit requirements that could affect plan design comparability [VERIFY: essential health benefit benchmark varies by state]
• Mark all jurisdiction-dependent regulatory references with [VERIFY]