7/16/1980 - Laserfiche WebLink

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_ The recent specificatithis estimate blank, and Wrs as a result, the various were free to insert any figure they felt appropriate or advantageous. From an analysis viewpoint, your decision makers are left with only mis-representative comparisions to choose from. In addition, the Aetna bid has ignored the itemized re- quirement of listing specific pooling charges, and has hidden them in incurred claims where cost cannot be seen. This will give a false low picture of administrative charges. 2) The age data provided was not reflective of the employees covered under the plan, but instead, it appears that the listing was inflated by including all employees, re- gardless of whether they were insured. The end result is that we based our bid upon the existing 205 insured employees (as of 4/1/80), Metropolitan bid on the entire listing of 240 employees. Aetna's bid was even more confusing. At various points in their proposal they point out that a) their bid is based on data submitted (240 employees) b) their bid is based on 270 employee contracts and 182 dependent contracts c) their bid is based on 175 employee contracts and 117 dependent contracts. As you can see, two things have occurred. Number one, every one is bidding on different groups. Dumber two, since any accepted bid based upon a high count would ultimately not be an enrollment reality, there would be a probability of an instant rate increase (2-a above) because of misrepresentation. In order to further point out the problem, let me refer to a contradiction which you undoubtedly have already noticed. Aetna's bid of $29.79 single, and $74.37 family, appears.to be lower than the Blue Cross and Blue Shield bid of $31.16 single and $82.34 family. The retention state- ment, however, shows that Aetna's annual charge to Indian River County will be $225,998.00, whereas the Blue Cross and Blue Shield annualized premium will be $182,882.00. In this case, since both bidders are "low", depending upon which comparison is examined, a rebid may be called for by this point only. 3) The specifications did not indicate the projected effective date of coverage. Since, with inflation marching on, bid rates would be necessarily higher if a carrier is quoting on a 12 month period of coverage from 10/1/80 to 10/1/81 (Blue Cross and Blue Shield) than another who quotes on an 8/1/80 to 8/1/81 (Aetna) contract period. All bids should be based upon identical risks. Caution should also be used to be certain that any "extended offer" is guaranteed in writing and a 12 month period of coverage is still guaranteed at that rate. 4) Undoubtedly, if an equitable comparison of bids is to possible, every effort should be made to specify the exact benefit levels desired. All carriers may not be able, perhaps, to meet every requirement exactly, how- ever, there should never be any "establish whatever benefits you wish to use" areas in the specification requirements. That is, after all, why specifications ar termed specifications. Clarity is essential. In this years specifications: g) The co-insurance limit was left entirely to each carriers preference Result: Blue Cross and Blue Shield bids $400 per year - Aetna bids $500 for two years - Metropolitan bids $1000 per year - Gulf Life bids $500 per year b) The lifetime maximum was to be determined by bidder, not the County Result: Gulf Life sets up $250,000 - Blue Cross and Blue Shield establishes $1,000,000 - Met- ropolitan and Aetna.uses "unlimited" c) Any determination -of what scope of coverage was desired in the area of supplemental accident care was literally impossible due to a total lack of clarity Result: Aetna provides $300 in benefits- Blue Cross and Blue Shield provides $500 in benefits - Gulf and Metropolitan provides no basic supplemental accident coverage. JUL 16198027 Bom '