 I think we're all set to resume and so Mr. Carney, do you have any redirect for Chris Pontiff? I do not. Okay. The next witness I think we discussed was Jesse Lucier from Department of Financial Regulation. Did I get that right? Are we going to go to Jackie? I forget. My memory was we were going to do just next, but I'm happy to do whatever's best. I see you're with us. Are you ready to proceed? Yes, I am ready. Can you hear me okay? Can hear you just fine. Could you please raise your right hand? Fine to the oath, custom to giving it. Do you solemnly swear that the evidence you shall give relative to the cause now under consideration shall be the whole truth and nothing but the truth. So I hope you got. I do. Okay. Please go ahead. All right. My name is Jesse Lucier. I work for the Department of Financial Regulation. My title is Administrative Insurance Examiner. I've been with the department for 11 years and I've been involved with several of the great filings. We've discussed this in the past, so I'll give a high-level review. As most people are aware that for the most part, insurance is a state-regulated entity, and that means that each state is responsible for the regulation of the companies that are domiciled within that state, MVP, HP, who I'll probably just refer to them as MVP. MVP is domiciled in New York, and so their primary regulator is the New York Department of Regulation. Vermont heavily relies on New York for their analysis of MVP and the MVP group. Having said that, the regulation of an insurance company within any given state should be substantially similar. Most states or all states have adopted similar regulatory laws and New York is a bit different, so MVP is subject to routine analysis by the New York Department and routine examination by the New York Department. I'll read a couple of paragraphs from the opinion. The first one is on page 1, the summary of opinion, which states the proposed rate filed by MVP, HP would not negatively impact its solvency, and the company otherwise meets Vermont's financial licensing requirements for a foreign insurer. Then I'll slide down to the bottom of the second page, the impact of the filing on solvency. In its filing, MVP HP has requested that the board approve an overall average rate increase of 16.6 percent based on the entity-wide assessment above and contingent upon GMCB actuaries finding that the proposed rate is not inadequate. DFR's opinion is that the proposed rate will not have a negative impact on MVP HP's solvency. This filing I'm reading is for the small group filing. There's a second opinion for the individual filing, which is substantially the same thing, except the rate increase is different. Since we're talking about the rate increase, my understanding is that, with new information regarding the hospital budgets, that MVP has submitted an updated rate increase, which is higher than the number on the solvency opinions, and my understanding is that Lewis and Ellis has not opined on it yet, but our opinion wouldn't change based on the updated numbers, assuming that Lewis and Ellis find that those rates are not inadequate. And then we've also discussed a particular sentence on page two under the MVP HP solvency opinion header. And I'll read that one now. DFR has determined that MVP HP's for my operations pose a little risk to its solvency, and I just wanted to quickly address that. That sentence, I guess the context is that the sentence shouldn't be read alone, it should be taken, the entire solvency opinions should be taken into account with that, and specifically the immediate sentence following that states adequacy of rates in contribution to surplus are necessary for all health insurers to maintain strength of capital. So with our determination that Vermont operations pose a little risk to its solvency, there's an assumption there that rates are adequate and that the actuarial assumptions are reasonably correct. And I just wanted to clarify that. Having said that, I would agree with Mr. Pontiff in that even a small block of business could potentially lead to solvency issues if that small block of business were to sustain large and consistent losses for several periods in a row. And I hope that clarifies everything. And of course, you can open up to questions, but I think that's it, Mike, and I'll toss it back to you. Thank you. Thank you, Jesse. First, we'll take questions from Mr. Carnady. Thank you, Mr. Lucia, your narrative was very helpful. You took most of my questions away, but let me go through and see what I have left and maybe just clarify a few things if I could. If you would please go to exhibit 14 in the binder and let me know when you're there. I am at exhibit 14. Okay, this is the individual letter which you just testified about. And then 15 is the small group DFR letter, correct? Correct. So if you would go to the second page and you see there's three bullets under Solvency Opinion. Yep. If you could read the first sentence, please in the third bullet. Finally in 2021, all of MVP holding companies operations in Vermont accounted for approximately 7.5% of its total premium written. Thank you. So you heard, you were on this morning and heard the testimony. Yes. And you heard, Eleni indicate 5% rather than 7.5 and then you heard Mr. Pontiff explain it could be somewhere between 5 and 7.5% depending on how you do it. You heard that testimony? Yes. So if the figure were actually 5% or somewhere between 5 and 7.5, would that change your opinions on solvency? No, it would not change our opinion. And that's the same for the small group and the individual, correct? Correct. Bear with me. These two letters, if you go to exhibit 14, that is dated July 5th and 15, also dated July 5th, the solvency opinions, correct? Correct. That was before, and you heard testimony about it, before the hospital budgets came out and MVP adjusted their rate request, correct? Correct. And you heard the testimony on that today, correct? Correct. So I think you've answered this, but I wanna nail it down. Does your opinion on solvency remain unchanged assuming the board approves the increase by MVP for the hospital budget proposals and the 0.1% reduction for risk adjustment transfer amounting to 24.45% for individual filing and 23.44% for small group? Will those rates be adequate? That wouldn't change our opinion, again, contingent upon Lewis and Ellis, not finding that the rate is inadequate. Well, I guess my only concern is that last part you just said contingent on, we haven't heard from L&E on this, so I may need to recall you if it's an issue. And general counsel, I don't wanna make Mr. Lucio your way around, but Mr. Lucio in the past I'm thinking as I'm talking, that what you just said is standard language in your letters, correct? Solvency? Yeah, and I guess to clarify, we didn't have an actuary review the rates and so we kind of defer to the care boards actuary to opion as to whether or not the rates are inadequate. All right, so you'll stand by your opinion, then I'm looking at exhibit 14, let's clarify what you just said. It would be helpful, why don't you read that last sentence on the page again, please? Sure, based on the entity wide assessment above and contingent upon GMCB actuaries finding that the proposed rate is not inadequate, the FAR's opinion is that the proposed rate will not have a negative impact on MVPHP's solvency. The rates that I just asked you about as you sit here at this point in the evidence will not have a negative impact on MVPHP's solvency, correct? Correct. So that's all the questions I have at this time. I don't know what Ms. Lee's gonna say exactly, we might have to recall Mr. Lucier, but I'm hopeful that that's not necessary. Mr. Hangoff, do you have questions for Mr. Lucier? Yeah, Mr. Lucier, the department didn't determine whether the proposed increase of MVP was excessive and adequate or unfairly discriminatory, correct? Correct. That's all the questions I have. Ms. Belivale, do you have any questions for Mr. Lucier? I do not at this time. Does any board member have questions for Mr. Lucier? I have a quick one. So the New York Department of Financial Services regularly has some regulatory role over insurance company and like lending, financial lending companies, et cetera. I just don't know what the breadth is of your domain. I'm sorry, could you clarify your question? Could you repeat it for me, please? Just trying to fully understand the Department of Financial Services, New York's Department of Financial Services, what they render solvency opinions on in New York. Is it banks and insurance companies? I am not 100% sure. And normally we focus on insurance companies and so to the extent of insurance companies, the New York Department would be doing work similar to Vermont or any other state. During the course of an analysis or examination of an insurance company, I'm not sure about the other industries. So a quick question. Has the New York Department of Financial Services ever let you down in terms of you relying on their review of a company here in Vermont? Not to my knowledge. And I guess maybe I would ask what exactly I mean by let us down. I know that there are cases where companies from various states will go into liquidation, but off the top of my head, I don't recall any large items in recent history, but I'd have to review that, I guess. Yeah, don't worry about it. I was just wondering if something popped your head that there have been some instances and obviously that's not the case. So thank you very much. Mr. Lusher, I don't expect Eleni to testify that the new higher rates are inadequate, but if you could please stick around with us on in the background in case you need to be recalled, that would be great. I will leave my tie on. Thank you. The next witness is Jacqueline Lee from Lewis and Ellis. Ms. Lee, are you ready to take the oath? I am. Please raise your right hand. Do you solemnly swear that the evidence you shall give relative to the cause under consideration shall be the whole truth and nothing but the truth. So I hope you got it. I do. Ms. Bellovo. Good afternoon. Please state your name for the record. My name is Jacqueline Lee. And where do you work? I work at Lewis and Ellis. And what is your position at Lewis and Ellis? I am a vice president and principal. Could you please turn to exhibit 21 in the binder? Yes, I am there. Do you recognize exhibit 21? Yes, it is my prefiled testimony for the filing we are talking about today. And can you briefly describe the information contained in this document? Yes, it describes my educational and work experience, the process of Ellen's review and our actual report regarding the findings. Is the information in this document accurate and correct to the best of your knowledge? Yes, it is. Is there any information in this document that you would like to change or clarify at this time? At this time, no. And do you wish to adopt this prefiled testimony as part of your testimony today? Yes, I do. Can you briefly explain your role in Ellen's review of this filing? Sure, I work with Tracy Hughes, who has been working on the MVP filings for several years now. She is the primary reviewer for this filing. Together, we review all aspects of the filing. We have internal discussions regarding the proposed questions and then make ultimate recommendations to the board. We have direct communication between us and MVP through the SERF platform where the filings are housed. And how do you submit your recommendations to the board? We provide a final report on Day 60 of the filing, which is 60 days after the submission of the filing. The report details our review and the recommendations that we have. And those reports are Exhibits 12 and 13. Can you please turn to Exhibit 12? Yes, I am at Exhibit 12. You're beating me. Well, mine is digital. And I've gotten good throughout today. Excellent. Do you have any changes to the individual report that you wish to make at this time? I do not. And do you have any changes to the small group report that you wish to make at this time? I do not. Can you explain your standard of review? Yes, we have a section in our report regarding the standard of review. It is on page three of Exhibit 12. We are reviewing for actuarial soundness under our standards of practice that is defined as not excessive, not inadequate, and not unfairly discriminatory. And do you review for affordability? We do not. It is not an actuarial standard. Using your methodology and standard of review, did you make any recommendations to modify these proposed filings? Yes, we did. If all of your recommendations were to be implemented, can you explain what the ultimate projected rate increase for the individual filing would be? Yes. We calculated a figure that is seen in our report. Subsequent to our report, we requested that the carriers for here MVP provide an updated calculation. They provided that calculation on July 7th, which is Exhibit 18 of this binder. The rate increase as modified with all L and E recommendations with the exception of the updated hospital budget is 15.7%. So for the individual filing of 15.7, but needs to account for updated information for hospital budget. And if all of your recommendations were to be implemented, can you explain what the ultimate projected rate increase for small group filing would be? Yes. We have the same information through MVP for small group that rate increase is 14.5, but does not account for the updated hospital budget. Do you find the 15.7% increase in the individual filing and the 14.5% increase in the small group filing to be reasonable? Yes, I do. But again, contingent on the hospital budget impact. Can you please explain briefly why you find them to be reasonable? Yes, some of our recommendations are for correction due to undisputed errors in the initial filing. Also, they incorporate information that wasn't available at the time in the filing. And lastly, they correct for what I perceived to be unreasonable assumptions within the filing. And have you reviewed the other pre-file testimony in this proceeding? Yes. And have you listened to the testimony today so far? Yes. Can you please discuss your recommendation about updating hospital budgets? Sure, a significant portion of MVP's premium goes directly to hospitals that are regulated by the Green Mountain Care Board. These prices that are paid by MVP are not known until after this hearing. So when the board issues an order regarding this filing, there will be more information and there is more information that we've heard about during today's testimony as of today. But the board ultimately will make a decision on these after the decisions are even issued for this filing. Therefore, we are recommending that the assumptions for unit cost be updated for the hospital budgets and any new information that comes to light between now and the order of this filing. And having reviewed the pre-file testimony and listened to the testimony today so far, do you wish to amend or add to Eleni's recommendation about updated hospital budget information? No. Can you please discuss your recommendation about correcting the paid to allowed normalization factor? Yes, the paid to allowed normalization factor is to reconcile between the URT that begins with the allowed claims with MVP's pricing methodology, which begins with paid claims. The URT is a reporting tool that is required to be submitted by all issuers who are filing ACA products. Carriers must demonstrate the relationship between the projected claims and historical claims and attribute these differences based on various categories set forth within the URT. In the initial filing, MVP made this paid to allowed adjustment in worksheet one of the URT and we are requesting that it be moved to worksheet two as it is more appropriate for the URT instruction. It should be noted that this is a reporting issue and does not impact rates. One other item I wish to comment on is that there was an error that was uncovered during this review that revealed that MVP had incorrectly categorized this adjustment during last year's filing and the 2022 URT. It was called the COVID adjustment. So there is a section in our report that shows the modification to that. Again, there was no pricing implication. However, this was just a different categorization than we saw in the prior filing. This part that I'm referring to is on page 10 of our report. So you can see that in exhibit 12. So just some more information but just wanted to point that out that it has no impact on the requested rate increase but wanted to point that out because I know that that was possibly a confusion portion of our report. This is also an issue with small groups but as Mr. Pontius has done all day and we're collectively talking about uncollectively talking about them. Thank you. So having reviewed the pre-file testimony today and listened to the testimony today so far, do you wish to amend or add to Eleni's recommendation about correcting the pay to allow normalization factor? No. And could you please discuss your recommendation about updating for risk adjustment transfers? Yes, the ACA introduced a program called the risk adjustment program when it began where premiums from carriers with healthier populations are paying carriers with sticker populations. So this is in effect a reflection of the base period experience but there is a lag in timing. And that lag in timing is that CMS did not announce until late June what those were for the experience period so MVP did not have enough information. This issue is very similar to the hospital budget where there's more and known information at this time than it was when they submitted their filing. So we are recommending that they are permitted to update their premiums for this more complete information. So having reviewed the pre-file testimony and listened to the testimony today so far, do you wish to amend or add to Eleni's recommendation about risk adjustment transfers? No. And can you please discuss your recommendation concerning the COVID vaccination assumptions? Sure. So as of the issue of our report, we felt that the COVID vaccination costs were properly reflected in the experience period and in a sufficient predictor for the rating period. That's typically how most of the assumptions handle or are handled within projection. So we recommended that they remove the entire cost because that was properly reflected. Today we have heard significant commentary that while I believe I received some exhibits late last night, we have not had a chance to review it. Also, the exhibits were presented such that they were just charts. So not having the qualitative description that Mr. Pontiff provided today, I'm not prepared to provide an explicit response to that and we'll do so after the hearing. Some of the things that were noted were using different utilization amount. I think that that could be something we reconsider, especially in light of the information that he provided today that they are unaware due to the way that the mass vaccination were handled during the experience period. He did make some comments as well about the unit cost. That is also something that we would like to consider. We do still have significant concerns about the use of the $104 amount, but we would like to more formalize our opinion after receipt of some more qualitative responses from MVP on this issue to supplement the exhibits that we've been provided today. So if I hear you correctly, having reviewed the pre-file testimony and listened to the testimony today so far, you do not currently wish to amend or add to Eleni's recommendation about the COVID vaccination assumptions but you may make a change in the future. Yes, that's correct. Great, and can you please discuss your recommendation concerning the large claim adjustment? Sure, so a lot of this is discussed on page 11 of exhibit 12 for our report. Again, this is another issue where we have a similar situation where we've received a lot of new information. I'm going to try and recall from memory all of the components. So one of the reasons that Mr. Ponte took issue to our recommendation was one, the use of the actual math, if you will. We would like to further review that, but we are in agreement that the way that he has performed the calculation uses more information that is known that was known at the time, so such as trending to get them on the same basis from a dollar amount standpoint, using member months to properly calculate a PMPM and using that to then review the three-year historical average or four-year, whatever makes the most sense, just making clear that it's not always required to use the three-year and making sure that we get some qualitative components around that. We do believe that smoothing and pooling is something that should be considered, especially in light of the fact that there's a lot of ongoing uncertainty. It is common practice that you adjust the base period to account for fluctuations over time that you may not think are inherently going to happen in the future. Some of the concerns that we have is there's potential deferred care given the ongoing pandemic that could have spiked during that time. Also, Ms. Lunge brought up the cyber attack which could have also brought to light some of these issues. And Mr. Ponce has testified to the fact that there were increases, these increases that they were seeing were consistent with other lines of business which calls into question potentially, yes, this could be an ongoing trend, but another way to look at it is that everybody is experiencing deferred care and maybe we shouldn't overreact quite so quickly to project that forward. And the magnitude seemed quite great to continue taking that number and then trending it forward. And even some of the board members have made comments that I think are very valid about potentially having the high rate increases impacting utilization could also impact these outliers as well. So at this time, I think I would like to, I can still answer questions, but I think to I guess anticipate your next question I don't wish to make any formal changes at this moment but I would like to have the qualitative response from MVP and to accompany the exhibits that we've already received today before making a decision. We generally owe the board an addendum due to the hospital budget increases that have come out. We always provide some information about that and if necessary, I would like to include in that addendum issues for this as well. Okay, so other than the COVID vaccination assumptions and the large claim adjustment, am I right that after reading the carrier's pre-filed testimony and all of the materials that have been submitted so far in the filing and then listening to today's testimony, is there anything you wish to add or change to Eleni's recommendation? Yeah. And if your recommendations as of today were implemented, do you believe that rates would be excessive? No, I do not. Do you believe they would be inadequate? No, I do not. And do you believe they would be unfairly discriminatory? No, I do not. Thank you. I have no further questions at this time. Thank you. Mr. Carnegie. Thank you. Good afternoon, Ms. Lee, how are you? I'm good. How are you? I'm good. Another year of you and I talking. That's right. Make it fun for them. That's right. So I appreciate your testimony and I think that some of your responses are gonna be, I still wanna do some homework on this, Mr. Carnegie. I'd like to go through it and just see because we need to get evidence in what we can agree upon and where you wanna do some more homework, okay? So if you could bear with me. Sure. If you would go please to exhibit 18 in your binder. I am there. So you heard testimony on this morning, this morning on this document. This is where the board asks MVP to plug in in their rate software, your conclusions in the report and double check the math. That's a layperson, not an actuary asking that question, but you're familiar with this, correct? Yes, that's correct. And you've reviewed this exhibit. I have. And so do you agree with the minor adjustments here that MVP is pointing out? Yes. So it'd be more precise. All the adjustments set forth and exhibit 18, you're in agreement on, correct? Yes, and I believe my intention in the direct questioning from Ms. Bella though was that I would quote MVP's calculations rather than what we had in our report. So hopefully I did that correctly. Thank you very much. Next, I'd like to go to your report, which is exhibit 12. That's just the individual report. Can you get that in front of you, please? Yes, it is. Okay, and just to get the roadmap going here, the five recommendations are set forth and the two that we disagree on this year are the COVID vaccination adjustment, which is the second bullet and then the large claim adjustment, which is the fifth bullet, correct? That's correct. Okay. And looking at exhibit 13, that's the report for the small group. And so would you please confirm with me that other than some percentage changes that we've had discussions on this morning, these reports are very similar in nature, same recommendations, just some different numbers. Is that fair? Yes, that is fair. Okay, so when I ask you questions and cross-examination, I'll be referring to the individual rate filing, exhibit 12, but my questions are gonna go to both filings. And would you just tell me if your answer is different on a particular question, if it relates to the small group, get a different situation? Otherwise, I'll assume that we're talking about the rate filings. Does that make sense? Yes, it does. Thank you. Okay. So let's go to page five of the report. I'm gonna talk about the hospital budgets. So on the bottom of that page, you see medical utilization trend? Yes. It starts there and then it goes over to page six and I would ask you to read the last sentence in the first full paragraph. On page six. On page six, please. Eleni concludes that an annual utilization trend of 1.0 appears reasonable. And that continues to be your opinion? It does. And you heard Mr. Pontiff's testimony today and you reviewed the objection responses, objections eight and nine. Eleni's questions about the hospital budgets after they came out. Yes. Would you go to exhibit 34, please? Okay, I am there. Okay, and this is the response by MVP to Eleni's questions on the individual filing regarding the hospital budgets, correct? Yes, it is. Would you please read the first two sentences in the response, please? The average rate increase is 24.54% under the proposed hospital budgets on the DMCB website. This is higher than the 17.37% average increase that MVP previously proposed. Okay, do you agree with that? Those two sentences? Yes, I do. And do you agree with the amount of the increase in the MVP rate caused by the hospital budgets if they're approved as submitted by the hospitals? Yes, if they are approved as submitted by the hospital. If you go to exhibit 35, please. This is the same response on the Eleni hospital budget question, but it's for the small group, correct? That's correct, yes. Would you please read the first two sentences in the response? The average rating increase is 23.78% under the proposed hospital budgets on the DMCB website. This is higher than the 16.61% average rate increase that MVP previously proposed. Okay, so same question. Do you agree with the amount of the increase in the MVP rate caused by the hospital budgets if they're approved as submitted by the hospitals? Yes, I do. And you heard testimony and I think you're familiar with the chicken and the egg problem we have the board grapples with each year where they need to, in this hearing, predict what they'll decide later on medical trend in the hospital budgets in those hearings, correct? That's correct, okay. And you recall last year that the board directed Eleni to do a historical analysis of the four prior years? Yes, they did. And Eleni prepared a chart post hearing that set out actually two years and three years and four years, correct? Yes, that's correct. So I would ask you to go to exhibit 42, please. And I would just remind you that this has confidential information but we're not gonna talk about that confidential information. And I would ask you to go to page three, please. Okay. And this is prepared by Eleni, correct? Yes, it is. And it shows the various hospitals and they're, if you go to the right column, the average four year difference, this is the table on the bottom, correct? Yes, it is correct. And the difference for five of the hospitals, if I'm counting right, was zero, correct? Looks like five, yes. And 11 of the hospitals, if you count those zeros and then you count all the hospitals under 1% or less, it's 11 of the hospitals, correct? What was the number you said? I'm sorry, I was counting. That's okay, 11. So there are 11 that are under what? Just non-zero? One or less. Under one or less? Sure. Yes. And the UVM Medical Center is the largest hospital listed, correct? University of Vermont, yes. And they're 1%, correct? Minus one, correct. Minus one, and that's correct. I was talking about reductions. These all show the reductions by the Green Mountain Care Board, correct? Yes. Thank you. So did you hear Mr. Pontus' testimony this morning about MVP taking that column and doing a weighted average? Did you hear that? Yes. And presuming you did not pull an envelope out and do a weighted average on the back of the envelope when you heard that testimony, correct? I did not, no. He said 0.7, though, you remember that? I will agree that you remember it better than I do. Okay, well, as you look at it, you're an actuary, you're better at math than me. Would you agree with me that the weighted average, given your knowledge of these hospitals, will be in the vicinity of 1% or something lower than that? Yes. Would you agree with me that if the Board chose to conclude, based on the historical data that L&E has provided, that they would again be making a 1% or less cut later this year at the hospital budget hearings? That would be a reasonable use of its discretion. Yes, I do. If the Board chose to conclude this year, that it would cut the hospitals by, well, let me rephrase this in support. If the Board chose to conclude now in this decision for this hearing, that it would cut the hospitals by more at those later budget hearings, say 4%, that conclusion would not necessarily be supported by this historical data in Exhibit 42, correct? Yes, that's correct. And would you agree with me that if the Board drew such a conclusion in this matter of a future decision, that would be before they heard all the evidence presented by the hospitals at the hospital hearings? Yes. As an actuary, you base your conclusions on data, correct? Yes. And you don't speculate about future events, correct? I think we speculate about future events all the time. Well, but you do it through the lens of an actuary. It's not like Gary Carnady speculating, you do it based on information and your experience, correct? Yes, that's correct. Thank you. Let's talk about second difference this year, which was on the strike there. Talk about the COVID vaccination adjustments. We haven't got this yet. So if you would please go to Exhibit 12, just so we can acclimate everyone, and go to page 16, please. And it's the second bullet. Okay. So this is an area, I think, where you talked about hearing new information today. So just bear with me and we'll navigate this together. Would you agree with me that Vermont's 95% one dose vaccination rate is very high and very commendable? It is very high and commendable. Were you aware of that when you wrote Exhibit 12, the actuarial memorandum? Yes. You were aware? Yes. Were you aware that Vermont, in Vermont, there were all these places you could go and get vaccinated for free, like up at the Essex Fairgrounds in Essex? Yes. So if you go to page eight to nine of Exhibit 12, please, this is the section at the bottom on COVID vaccination. So this is your thinking on the COVID vaccinations that goes to page nine, am I correct? Yeah. There's no reference to free vaccination offerings in your report, correct? Correct. Do they have free, or did they last year have free vaccination sites in Texas last year where you live? Yeah. And did you have to, we heard testimony or some questioning earlier about presenting your insurance card. Did you present an insurance card at all when you got your free vaccinations? I don't remember. Please go to page nine. Would you please, there's the first full paragraph. Would you please read that first sentence? MVP provided further information that the $2.65 PMPM cost of COVID-19 vaccination in the experience period represented a utilization rate of 37% 1.7 vaccinations per utilizing member and a unit cost of $39.31 per shot. Thank you. So first that reference to the 37% you would agree with me that that references claims for coverage by MVP insurers. Yes, I would. That would not include someone going to get the free vaccination, correct? Until we asked Mr. Pontiff, that was not our understanding. Well, and we didn't, Ms. Belivow did. Can you say that again? I got mixed up in your, can you explain again? Yes, it was our understanding that the insurance companies would be responsible for the administrative charge of $40 even if they went to a mass vaccination site. I see. So this is new information and it was not considered in your opinions, correct? That's correct. Thank you. You heard Mr. Pontiff's comment you heard Mr. Pontiff testify regarding the 37% and CMS being 52% and then you heard the information about the 95 for the first dose for Vermonters, correct? That is correct, I heard that. And would you agree that a vaccination rate of 52% is reasonable and reflects these vaccinations received without insurance monies? No, I'm not sure at this time. I don't think I can form that opinion given what I've learned today. So is that something that you will address in your supplemental? Yes. The board? Yes, yes, it will. If what Mr. Pontiff said was correct and I have no reason to think it wasn't but assuming it was correct, I'm asking you to assume would you agree that the 37% would be suppressed because it doesn't include individuals who got vaccinations for free? I agree that would be correct. The 37% would be suppressed. Next, let's talk about unit costs and I understand from your direct, so just bear with me. Would you agree that in 2023 MVP will be paying both the administrative cost of $40 and also the ingredient cost of approximately $64 for the total of $104 per shot? I do not agree with that at this time. And why not? There have been news releases that have said that something similar may happen where the government may subsidize that. So I think there is a question as to whether or not and again, I would like more time to reconsider because the testimony today was slightly different than the information provided within the filing but I still stand by the fact that I think there is still uncertainty that it will be the full 104. What news reports, please? I will provide that in my admin. I can Google it for you if you'd like but I don't think that's appropriate because I can't do that when I'm sitting in front of you. So this is another issue fairly that you'll address in your supplemental filing with the board, correct? Yes, please, thank you. Do you believe that CMS is reputable? I do. And to be clear, if going back to page nine, that first sentence, the last part of it says any unit cost of $39.31 per shot. That is the amount that you used in opining, correct? Basically the $40 you didn't include the ingredient cost for the reasons you described, correct? I think that's a fair assessment, yeah. So if you go please to the next paragraph on page nine which starts, Melanie recommends. Yeah. Just read the last sentence in that paragraph. This recommendation decreases rates by approximately 0.6%. So assuming after you go and look at the data and all the news reports, you conclude that Mr. Pontip is correct on the ingredient cost estimated around $64. Would that result in a reduction in your reduction? Would your 0.6 be a lesser number? If the unit cost increases to $104, then yes, the decrease that we have stated would lessen. Order of magnitude, any idea? No. But is that something you'll address in your supplemental filing with the board? Yes, I will. Let's move to the large claim adjustment. That was the last bullet. Just to acclimate ourselves, go to page 16. So that was a decrease in rates of 0.7 on the individual and I think it was 0.9 on the small group, correct? That's correct. So I want to show you what's marked as exhibit 41. I'd ask you to go to it please. So I want to just first just, you heard the testimony, this was prepared by MVP and I just want to point to the numbers at the bottom and then ask you a question. So you see on the left side is for the individual market and it shows a minus 0.62, do you see that? Yes, I do. So that's MVP and we'll talk about it a moment but that's going from the proposed seven down to 0.62. 0.7 to 0.62, correct? 0.7 to 0.62, yes. Okay, and then on the right is the small group claims and that's going from the suggested 0.9 down to 0.56. Do you see that? Yes. So you heard Mr. Pontiff's testimony regarding some changes to your quantification of your opinions on large claims adjustments. My question is do you concur with these adjustments by MVP reflected in exhibit 41 using the PNPM weighted averages, accounting for claim trend and accounting for membership changes during the years? Mr. Pontiff said that he would provide to us how he came up with the trended numbers that are listed for the various years. So we would like to see that. The three year average is not a weighted average, it is a straight average. So assuming that that is accurate, which I believe it is, then if that all is okay, then yes, I agree with the actual math behind it. As reflected in exhibit 41? Yes. And that's something you'll confirm in your supplemental filing? Yes, I was just gonna say that. So thank you. Thank you. Would you please go to exhibit 12 again, please? And go to page 11, and there's a section on large claims adjustment, then there's a table there on historical large claims. Let me know when you're there. I am there. Would you agree with me that MVP has seen an increase in the number of claims above $200,000 over the last three years? Yeah. Would you agree the same as true for the small group? Yeah, yeah. Okay, if you could go to page 14 of exhibit 12, let me know when you're there. I'm there. If you could go to the last paragraph, that's your paragraph on reasonableness check, do you see that? Yeah. And read the last sentence. MVP's filed CTR of 1.5% would place it at around the 27th percentile for all QHP carriers. So there you make reference to the CTR of 1.5%, correct? I'm sorry, I didn't hear your response. Thank you. Correct. So I just wanted to clarify, just so the record's clear on what the CTR is that MVP is asking for. There you said it was 1.5. And then above in that table, I think you heard some testimony on it this morning where I walked it through with Mr. Pontiff. Would you agree with me that the risk margin number on the table above that 1.5%, that's the CTR that MVP is seeking this year, correct? Yeah. If you would go to page 15, please. Well, I meant to ask and MVP's CTR doesn't have a bad debt component. That's something different, correct? In the, when we're talking about the 1.5, that does not include bad debt. Thank you very much. Okay, if you would go to page 15, the third paragraph, first sentence, if you could read that, please. L&E Belief. Starts with that. Yes, please. L&E believes the CTR assumptions are reasonable and appropriate as filed. And that's the 1.5 CTR, correct? 1.5, yes. And do you still believe that the CTR 1.5 is reasonable with the addition of the hospital budget increase? Can you rephrase that question? Sure. We now have information about the hospital budgets. And I'm asking the CTR 1.5, does your opinion change on that CTR in light of the hospital budgets? Is 1.5 still reasonable in your view? Yes. You go back to page 14, the third paragraph. Please read the second sentence. The 2023 projected federal loss ratio using this CTR is 91.9%, which exceeds the staff's Tory minimum, MLR of 80%. And could you please give your opinion on the significance of the 91.9 versus the MLR of 80%. MVP exceeds the staff's Tory minimum, MLR of 80%, meaning they will not have to submit refunds to policy holders for having premiums that are too high. And the CTR is significantly higher than that statutory minimum, correct? I don't think you asked the question right. The CTR is 1.5. It's higher than what? Pardon me. Let me read the sentence and ask a question. You're right, I mistake. Thank you. The 2023 projected federal loss ratio using this CTR is 91.9%, which exceeds the statutory minimum, MLR of 80%. So now let me ask you a question. Mr. Pontiff described, so for every dollar, 91.9 cents of it goes to claims and that's lean or he said something to that effect. And it certainly exceeds significantly the statutory minimum. I don't know if he said all that exactly, but that's my question. Would you agree that it significantly exceeds the statutory minimum? He does. Let's go back on, so on 14, that last paragraph, the reasonableness check, and you've again included these statistics this year, correct? Yeah. And it involves reviewing 442 carriers nationally. Yeah. Correct? And the second to last sentence, the premium weighted average CTR for all carriers was 2.4%. And in the last sentence, it shows that MVP was in the 27th percentile, correct? Correct. What does that mean when you compare MVP to that premium weighted average? It means that MVP tends to file a lower CTR than nearly 75% of the company, that file. Thank you. Just above the reasonableness check paragraph, there's a tape and this shows what the board ordered for the CTR versus actual, correct? Yeah. And as an actuary, that discrepancy is concerning, correct? It is. Like the numbers to align, correct? Yes, it's difficult for them to perfectly align. However, we would like them to be closer than they are. Okay, next, if you would go back to page 15, the second paragraph, and you'll see just so you can get your bearings, this paragraph has five sentences. Please read the first sentence. It is slightly concerning that MVP has experienced overall negative profit in the last few years. And there was a significant decrease in the RBC in 2021. Could you explain your concern? Yes, looking back to the prior table, there is a decrease or a loss of 11% for 2021. And if that continues, then that is going to continue to impact the RBC if you keep all other things equal, meaning that the New York business doesn't do extraordinarily well or extraordinarily bad. So it's concerning when you start to see losses that are large and then the RBC declining over time because then that shows a potential pattern. And at some point, regulatory bodies get involved when the RBC drops to a level that is too low. If you go to the four sentence, please, and read it aloud. Eleni notes that it is not sustainable to have long-term negative profits and therefore a higher CTR could be justified. You heard Mr. Pontiff's testimony about the Vermont losses last year, the significance and the amounted for 96% of MVPs losses. I'm not sure that it amounted to 96% of their losses. I know that an amount, according to him, it amounted to 96% of the numerator for the capital for the ACL portion of the RBC ratio. Not sure that those two are equal statements. Assuming I'm right, just assuming I'm right. You would agree with me that even if Vermont is approximately 5% of MVPs business under circumstances like last year, Vermont business can have a significant impact on the overall company. Yes, it can. And in that fourth sentence you just read, you referenced that higher CTR may be justified. Correct? We said could be justified, but yes. Could be justified. And you didn't say that a lower CTR could be justified, did you? Ms. Jack, this characterizes the witnesses statement. It's a question about the exhibit and what's contained in the exhibit. I'm asking her a question. Yeah, overall, please answer the question, Ms. Lee. I would say in the next sentence, we do opine that 0.5% to 3% would be considered reasonable. Therefore, that particular sentence does not say that it's okay to have that it is actually following the comment that is not sustainable to have long-term negative profit. And if that continues, then a higher CTR is justified. I don't think that that necessarily means that a lower CTR could not be justified. There's only been one year of losses. The year prior there were not losses. So the last sentence, that's fair, the last sentence says given this information, right? It refers to information prior to that sentence, correct? Correct. Going back, I just want to let Mr. Lucia go and I want to make sure I ask you the right question. So let's go together to exhibit 14, please. I am there. And so the rates that MVP is proposing now with the hospital budgets, if you go to page two at the bottom, I'll read you the sentence based on the anyway, assessment above and consistent bottom, Green Mountain Care Board actually is finding that the proposed rate is not inadequate. The RFR opinion is and it goes on from there. So the proposed rate by MVP with the amended rate with the hospital budgets that you've heard testimony on. Do you find that that rate is not inadequate? I agree that that rate would not be inadequate. Last question is the timing on your, and you're under oath, I'm kidding, but the timing of your amended response, we have to brief on this. When you expect you'll get that to us. I know you need some information from MVP. Correct. When are you required to get your final briefing to the Green Mountain Care Board? Sounds like we should talk about this offline after at the end of the hearing. That's fine. Thank you very much for your time. Yeah. Thank you. Mr. Angolf, questions? Yeah. Hi, Ms. Lee, how you doing? I'm good. I'm gonna pin you so that your front and center for me. Worst things that happened. I'm gonna try to make this quick. Okay. There are many elements of the rate filing in connection with which you found that that MVP's assumption was reasonable and appropriate. Correct? That's correct. You never found did you that MVP's assumption on any of the elements of the rate filing was the lowest possible assumption or reasonable actuary could arrive at, correct? No, we did not review under those circumstances. Sure. You weren't asked to do that, right? Correct. Yes, we were not asked to do that. All you were asked to do was to determine whether MVP's assumption was a reasonable and appropriate assumption, correct? Yes. And kind of combined with the standard of review being not excessive, not inadequate and not unfairly discriminatory. Sure. So there are lots of different assumptions that can result in rates that are not excessive, inadequate or unfairly discriminatory, right? Yes, that's correct. Okay. If the board were to ask you to come up with a reasonable range of assumptions for each element of the rate filing, that is a reasonable range of assumptions that would produce rates all else equal that were not excessive and adequate or unfairly discriminatory, how would you do it? So I would prefer not to provide a reasonable range by assumption. That would be how we would develop. The main reason being is that there could be, if we develop, let's say for example, for the 10 categories, we have a range and the board decided to choose all the low end of every single range in the 10 categories than an aggregate that could produce a rate that was inadequate. So therefore, how I would propose doing such an exercise we would provide a reasonable range of an average rate but we would go about it the way in which you described. We would just ensure that the ranges, we didn't always assume the low end of every range produced such we would produce an inadequate rate. Sure, and I was not either expressly or implicitly asking you to assume the lowest. Right, but when you give ranges individually like that, there's a tendency to evaluate them in isolation and never consider them in the aggregate and that's a big part of what the actuarial soundness and actuarial standards of practice address. So we would wanna pre-control our work products such that any outside person would not draw those types of conclusions. So you could advise the board, don't choose the lowest for all 10 in your example and similarly, don't choose the highest. That is correct, yeah. Could you turn please on exhibit 12 to page two? Okay, I'm there. Okay, and in the third column, the column under average 2023 premium, PNPN, you see that? Yes. Okay, you didn't evaluate any of these for affordability, right? That wasn't your job. No, we did not. Okay, and these are all premiums that people pay based on L&E MVPs proposed 17.4% increase, right? Yes, it's an average premium. So I don't know that a person would pay exactly $409.74, but it is a solid representation of what somebody would pay and is representative of the rate increase that was initially proposed. Could you turn please to page six? Okay. Relatively minor question, but on that table there where you see it says specialty 16.3 and then total 10.9. Yeah. Doesn't the total 10.9 give too much weight to the 16th? Well, let me ask you this way. How did you arrive at the 10.9 based on those three numbers above? It is a weighted average for cost. So to your point, there is a higher weighting towards the 16.3 because specialty drugs are more expensive. Okay, could you go to page seven, please? Okay. And in that table there, historical allowed RX trends, you see that? Yeah. You've got the four-year average number of 10.8, right? The three-year average number of 12.6. Yeah. Is it an acceptable actuarial procedure to eliminate the high and the low? And in this case, you would kick out the 21.7 as the high and the 2.5 as the low and just take the average of the remaining three. Over the five years? Yeah. I mean, that is an averaging method that could be used. I think that that puts too much weight on his, far too much in the past that we would basically only rely on 2017 and 2018 data and then the most recent, but that is an averaging method that is used. Okay, could you turn, please, to page 13? Okay. Okay, in the paragraph below the table there, in the third sentence, you say in 2022, MVP began managing the billing and payment processing functions, which had an estimated $6.61 to administer the expenses. You see that? Yeah. Okay, so my question is, before MVP began managing these functions, who did it? I think you asked that question last year and I don't know. I guess maybe the DHC? I guess my questioning must really have made an impression. I don't remember that question. I apologize, I don't remember your answer, but the reason I asked it then and then I asked it this time is that you say that it added $6.61 to admin and that's fine, but these processing functions had to exist before that somebody had to do them, right? I agree, and I think that's why the question stuck with me because who was doing it before? So I think that's a better question for MVP. But I mean, should the additional $6.61 be tacked on if before that somebody was already doing those things and it was in the rate base? I'm gonna just object, the witness has already testified, she has no idea what that's about. I didn't understand that to be your testimony. So if you can answer the question, Ms. Lee, please do so. So if it is included in the experience data, then you're right, it shouldn't be added back on, but I think that the sentence makes it clear that this was not part of the experience period, that's why it's being added. So therefore, I think it's acceptable to add it. I do agree that it's unfortunate that it was apparently free before, but my guess is that someone was paying for it and maybe they were paying as part of taxes, but I'm not really sure. Very good. Could you turn please to page 14 of the same document? Okay. And at the bottom, you, well, let's start at the top. So you have total CTI there, 1.5 for risk margin and 0.3 for bad debt. Do you see that? Okay. And you look at filings in other states, right? Yeah. Okay. Is it typical for carriers to have both a risk margin amount and then a separate bad debt amount or do they wrap them, typically wrap them together? I guess I would say generally I see them together Yeah, I'll go with that. I generally see them together. Okay. At the bottom of that page, you talk about the 442 carriers whose filings you reviewed. You see that? Did those 442 include both for-profit and non-profit? Oh, it included all types of carriers. We did not make a distinction. And is MVP for-profit or non-profit? I believe this is their non-profit arm. Okay. And did you do a separate tally of where MVP stood regarding its CTR factor, just looking at the non-profit carriers? No, we did not make that characterization in our analysis. Okay. Thank you, Ms. Lee. That was not that kind of, what was it? Thank you. No, no, thank you. Well, now we'll go to the board members. Board member Walsh, do you have questions for Jackie? None of the staff, thanks. Board member Pelham. I do. It's not so much a question, it's just a clarification. I can't hear you, John. Pardon me? Sorry, I must've been having connection issues. It's just kind of following the bouncing ball. So in July 5th, you rendered an opinion that the rates, and these are the originally filed rates, adjusted, so you're in the 15.7 to 14.5 range back then. And basically saying they are not inadequate and not excessive. And then this black swan comes along all the hospital budgets, and it's a 24% increase. I mean, so the rates are in the 24% range and it's a 45% increase as we discussed this morning. So it's a big number. It's not like 3% or 2%, it's a big number. And so then I'm looking at the DFR's opinion and I'm seeing that their opinion is contingent on you saying that the proposed rate is not inadequate. And I say to myself, well, how can the proposed rate not be inadequate? Because they're increasing it by 45%. So it's definitely got to be adequate. And so I'm just kind of at a loss. I mean, I'm thinking about maybe the hearing tomorrow night when someone says, well, what's the trail of your actuary from the July 5th opinion to now? And you said earlier today, again, that it's contingent upon the hospital budget process. But I don't quite understand that. So does that mean that we'll be going into the hospital budget process and the actuarial work is basically neutral or silent on it? That wherever we end up, we end up. But and the rates at the 24% are okay. But it's not part of your bailiwick to opine on that at this point in time. And so we'll be heading into budget season. At least I'm asking for your help here. Finding a path that or explaining to people how this has moved through time. I was pretty clear up until July 5th. And then I saw in the Blue Cross Blue Shield, some of these impacts of the hospital budget process. But to me, that's their wish list. I mean, that's what they do. I mean, it's just like any other applicant kind of looking for revenues that help the organization. But I don't know how to explain this circumstance in the context of your work beyond July 5th. Right. Okay, well, first we will be submitting an addendum. Although I'm not sure that you're going to receive all the answers of what you just asked. The issue is that of timing. The Vermont process to date has always been that the hospital budgets are approved after the rates are approved and ordered by the board. And until this year, although we've had years where there have been some significant increases, there have not been the increases that have happened this particular year. So I think it also to my point is not going, our addendum is not going to provide too much clarity because we've never seen anything like this. You are not bound by an actuarial standard nor is it really even overly appropriate to review the hospital budgets in that light. What I do is make sure that the rates that the carriers are required to pay in starting 1123 for this reading cycle are in alignment with the contracts that they have in place. In other markets, those are active negotiations that are not nailed down. They are actively going out to their big systems and it is up to the minute information and then you put your best estimate in. Typically, while dates will, and we're part of that, review that for overall reasonableness, we don't typically ask for the contracts by carrier or by, I'm sorry, by hospital. This is different though. I know that the board members have also mentioned that it's a cap, however, that's not how it's been handled in years past. The number that you approve is the number that they put inside of their spreadsheet that goes directly into the unit cost trends number. So quite honestly for me, it's not a reasonable exercise or there's no actual size to it. It is a number that we put in. And so right now we're in a very difficult position that, and we being just the general community of this group, is that these numbers are significantly high and even I, like you, are very, you know, it's very shocking to see the rate change. Normally it's usually less than a percentage point because they put in their best estimate and then the estimates come in that someone in alignment with what was requested in the past year. And that was not the case here. So unfortunately it is a direct, your decision in September will have a direct impact on this rate increase at this time, but you won't know that in advance. So I'm not sure I can really help you other than to say that, you know, it's more of a known factor rather than an unknown. We just don't know it right now. Well, I do think that's helpful because even, you know, you saying that we're in murky waters is comforting. Yeah. And, you know, I've been through this what three times and never seen this problematic, but now it's still a lot of unsettled stuff. And I agree that it's stuff that you can't opinion about because you don't know what it is. Right. And it's, again, it goes back to the decisions that you all make once you've reviewed all of the, you know, pages and pages of information. We will be providing as part of the intended some historical review of what you've done in the past and how those increases have come in. And I think the other reason why it's been fairly immaterial during this portion of our hearing is because the rate changes from the hospital budgets have been generally in line year over year. So when there's a minor tweak, it's also not if hospital budgets go up 1%, the rate increase doesn't go up 1%. It's a, you know, that particular hospital as a component of the entire rate. This time is just very large. Do you have a sense that your, you know, kind of your next opinion will make it clear that there are things that are dependent on the hospital budget process and are unknown to you at the time of the report. And therefore, you know, folks cannot extend your opinion on what you do know to the things that you don't know because you don't know them. If you can follow that logic. Yeah, I think we try to articulate that we have a draft started because we've seen them, but we will try to make sure that that's very clear that it is contingent. And that's why we generally have a recommendation to the board to be very thoughtful that whatever, you know, whatever you're gonna do in September or October timeframe for the hospital budget that it be consistent with what decision you make here. Because as you noted, the increases were significantly high and absolutely exceed the CTR presented by either carrier, which means that more solvency issues could occur if there's a disconnect between the two. Yeah, well, it's just my final sentence here is that I would find it helpful to be in a position, you know, where hospital budget people, you know, can't say, well, these are the rates you approved, you know, for Blue Cross Blue Shield and MVP. And therefore you give us that money. But this is going on during the hospital budget process. So just to be able to make it clear to folks out there that it's not over until the budget, the hospital budget process is over. Okay, we will note that. Thank you, Tom. Thank you. Board member Holmes. I don't have any questions. Thank you, Mike. Board member Lunge. Hi, thanks. Jackie, I just have a couple to follow up on your discussion with Tom. I wanted to, could you go to exhibit number 34, page three? You can tell me when you're there. Yeah, okay. I'm there. Yeah, it's got the blue and the green. Yes, this is a chart called Vermont Community Hospital's History of Annual Increases in Charges. Yeah. Okay. So I wanted you to take a look at the 2019 and 2022 approved and approved columns. And can you tell me how many hospital budgets at 10% or above were approved in those two particular years? In 2019 and 2020? 2022. You don't have 2020, I don't think. Oh, you're right. I'm sorry. I didn't read it right. I assumed that said 2020. Okay, so for 2019, there is one that is higher than 10%. And this isn't confidential, right? No. And then in 2022, there were none. And for the submitted request in 2023, can you tell me how many hospitals requested 10% or above? Eight, I believe, it's my count. So the longer half. And that was for the submitted. That was for submitted. There is that commercial, which I didn't quite count, right? That's fine. Yeah, if that would add, it looks like one hospital, which would be Porter. That's right. Yes. Thank you. And then could we go to exhibit number 42, which is your report from July 27th, 2021? Yes, I'm there. Okay. So the calculations that you did in this report predated the decisions for 2022 hospital budgets. Is that right? That's correct. So any spots that occurred in 2022 would not be factored into the averages and the other analysis that you did. Is that right? That's correct, yeah. Have you done an analysis of what might be, if there was any sort of rhyme or reason to what happens when increases over 10% come in in terms of what the board does? We have, as part of our addendum, we've been reviewing some of that information. And while I'll let the addendum truly speak to all the details, we have noticed that there is something of a cap that the board does not allow increases to be in excess of. Well, I don't need you to, you can talk to it in your addendum, that's fine. I don't wanna get ahead of ourselves. And then I guess my other question would be, have you looked at approvals compared to the benchmark set in the guidance, hospital guidance? No. Thank you. So earlier, MVP's attorney asked you if the board concludes it would cut hospitals by more than, I believe he said 4% later, that would not be supported by the historical data. And you said yes. But the data that you were talking about would be simply the data and the analysis done as of 2021, is that right? That is right. I mean, there have been reductions that exceed that, I would say on average, that's not typically been the case, but it is as of 2021. Thank you. I have no further questions. Thank you, Mike. Mr. Chair. No questions. Is Bellovo any redirect? Can I just have one moment, please? Sure. Thanks. No questions. Thank you. So I think we're ready to move on to Mike Fisher. Thank you. Thank you, Mike. Thank you, board members and MVP, would have been great to spend the whole day with you and couldn't think of a better day to spend inside out of the sun. Like on Monday, I wanna start with a shout out to the high quality and insightfulness of this year's public commenters. Yes, I know that some people commented about insurance products, not in consideration here, but many of them were right on target with important perspectives about how all of this plays out in real people's lives. The themes I talked about on Monday of this rate increase in the context of overall inflation, ability to get appointments for the care they need, impact on employers, the disconnect of these rates rising faster than real wages, and how the proposed rates impact providers who are barely making it, and of course the level of desperation, all of these dynamics are well articulated in the public comments and apply here today as much as they, for MVP as much as they did on Monday. I wanna add one more though, and that's that the dynamic of people not being able to afford to use their plans. That is, they've managed to afford their premiums, but they defer care because they can't afford their deductibles. One person said insurance is already so expensive that we can hardly afford it, even with two adults who work full-time and these deductibles and these high deductible plans don't cover anything. It's hard to understand how they can need more of my money. In response to questions and comments from board members, homes in Walsh about affordability and how people are likely to behave when rates go up, we have the conversation every year about what the term affordability means. From the HCA's perspective, the term literally means do people reasonably have enough money to buy the product? If you have a great product that costs, let's say $5 and I only have $3 in my pocket, it doesn't matter how much you've done to reduce your costs or even what a good value the product is, I still only have $3 in my pocket. Even if you tell me that this product, though it only costs $5 is worth $10 to me, I still only have $3. I think it's really hard for people who have flexibility in their budgets to understand this. A family of four purchasing a standard MVP, non-high deductible health plan who are just above 400% of the federal poverty level, according to current law, would be expected to pay over 25% of their income on premiums as before cost sharing. That same family purchasing a gold plan would pay almost 28% of their income and for platinum, they'd be expected to pay over 33% of their income. By the way, this calculation, we did this calculation on the originally filed rates, not the very recently upward adjustments. So it's even worse than that. And we didn't have the opportunity to do that calculation on the current rates because we don't know how the upward adjustment plays out at each metal level. And I'll add just because I'm on this topic, nor did the public have an opportunity to comment on the currently proposed rates. What do people do when insurance rates go up faster than real wages? As member Holmes explored in her questioning, people are often pushed into lower value plans. I was pondering the question of how a rational actor approaches this. If I have a lot of predictable health expenses in my family, you'd expect me to buy a richer value plan, right? Lots of people make good predictions or guesses about their family's healthcare needs. Lots of people make bad guesses or predictions. This has always been the case. But what's a rational person who believes they have significant healthcare needs supposed to do if 33% of their income is just out of whack? They can't do it. Therefore, I think they're forced to buy a lower value plan even though they know that they're gonna be in real trouble when they or their loved ones need care. And here's a point that I don't think that's been said out loud today. One outcome of more and more people being forced into lower value plans or possibly going on insured is that many of them will still need significant care and end up with medical bills they just can't pay. I think we know, or maybe I should say, I believe that for many Vermonters, the proposed rate increase will result in more medical debt. Putting more pressure on Vermont providers, more pressure on hospital budgets. Thank you members of the board. Thank you for the long day and for the work in front of you. And please do everything you can to recognize in your decision what this decision means for Vermonters who will be directly impacted. Thank you. Thank you, Mr. Fisher. Mr. Carnegie, do you have questions? I do. Hi, Mr. Fisher, how are you? Excellent. It's all well said. If the board finds that the hospital budgets, the hospitals could charge, say, 7% more for services provided next year, you would agree with me that the HCA would want the insurance in Vermont, the folks that you're representing, to have a corresponding insurance to cover that increase, correct? Yes. That's all the questions I have. Does any board member have questions from Mr. Fisher? Okay, thank you, Mr. Fisher. Issue on the binders. And why don't we start there? So I did get a chance to look at it. It's a very large document. I haven't looked through the whole thing, but I think it fits within the hearsay exception under rule 8038 for public reports. So I don't think it should be excluded for that reason. There's nothing to indicate that the data in the report is untrustworthy under that rule. To the contrary, it's a report that's commonly relied upon to understand issues regarding affordability of insurance in healthcare and accessibility of healthcare. So I don't think it's hearsay, or I think it fits within the exception to the hearsay rule in terms of the 403 balancing. I don't think the probative value is outweighed by dangers of unfair prejudice or confusion of the issues. I think it is helpful and is something that the board is already familiar with. I don't think it's, like I said, I haven't looked at the whole thing, but it strikes me as not opinion, not opinion, but factual information similar to information that's already in the binders, the CDC information. I think I'm going to admit it into the record over your objection, Mr. Carnady. And so please consider that done. In terms of next steps, I heard a lot of follow-up questions. I think we're going to have to, the board is going to have to regroup and get a set of follow-up questions out. Hope to do that tomorrow, but if Mr. Pontiff is still on the line, I think there were a number of things that I think were discussed in terms of follow-up. So I would maybe start getting some of that together because there's not a lot of time. So we'll try and get a set of follow-up questions out tomorrow, so please look out for that. I also would like a little bit more detail around the timing of Ellene's supplemental report. So Jackie, do you have any ideas there about how close that is to being ready? Well, I don't know, I don't see my, maybe Friday. Let me see if my team yells at me, hold on. I think that Friday could be fair if we couldn't have Till Monday, that would be great, but I'm trying to, I don't have my outlook up so I don't know when deliberations start. So that's kind of why I was willing to work with the team on when like Mr. Carnegie has to get his stuff done and kind of work backwards from there. I don't know if those dates are set, I think is my point. The briefing is due on July 28th, I believe. So if MVP could provide that additional information that you need on those, on the additional information that you need by the end of this week or tomorrow, the end of this week, would Monday be a reasonable turnaround time for that? Yes, I think so. I think Jen sent over the, because we can also use the recording and she sent those over late. I don't know, I thought it was the day of, will those be pretty readily available this evening because that could help us too? Yes, I can send those this evening. Okay, great. So yes, I think Monday would be really helpful and we can do that. And if it's done sooner, we will direct it out. Okay. General Counsel Barber, can I ask a question then just on that timing based on that whole discussion? Just so we're clear. There were questions asked by board members and then there was a number of clarifying, there's in the addendum, Ms. Lee's gonna address certain issues and in that discussion with her, she made the point, well, I'd like to get the backup on this or that so we can do that. So I see there's a request for two bits of information, board questions and then questions that Ms. Lee had. So if we're talking about both of those by Friday, I'd like to ask Mr. Pontiff, is that doable? I don't wanna promise something that you can't do. I'm hopeful it is. Yeah, hey, Gary. So I actually already pinged the L&E team with an email and said, hey, let us know the most efficient way to get this to you. I didn't know because I don't know all the rules. So I don't know if I have to go through a surf objection or what, but we have that readily available to get to L&E essentially immediately. So that's not a concern. The timing concern will be more around the follow-up questions that have to go to the financial planning and analysis team, the contracting team, they'll have to gather information and make responses which will take more time and that is not doable by Friday. I can almost guarantee it. That will take some more time. So if it, thank you, that's helpful. So if it makes sense, I think we would just provide information on a rolling basis, start with Ms. Ellis's request and then Ms. Lee's request. Sorry. It happens a lot, it's okay. I'll take it. I just don't have the name on the thing. No, when you first started as a witness, I had a trial where my client was named Jackie Ellis in the first two years of cross-examining. I kept calling you that, remember that. Sorry. I do. That's okay. On a rolling basis, it gets you that information by Friday as we get it. I do think probably it needs to go through SERF because the HCA is entirely, see its evidence. So they need to see it as well as we provide it. And then we would provide the board questions as soon as we can. And then if we've got the, and this is a question for Jay and his team too, if we've got Ellen E's addendum by end of day Monday, do we need more time for briefing or do we think we can get that done by Thursday? And is there any possibility of having additional time? Well, the HCA would support additional time but we'll live with obviously whatever you decide. Let Mr. Barber stall for a minute. Chris, we are going to post an objection in SERF ASAP so you can reply. Sounds good. Thanks. So I understand that the responses to board questions couldn't be out by Friday. That's completely reasonable. We will try to get that out in writing tomorrow and expect a respect responses next week. The briefing currently do Thursday the 28th. Our day 90 for decisions is a week after that. So that is pretty tight. We have maybe just an additional day. As is the chair's retirement. Yeah, that is probably reasonable. So why don't we change that to end of the day on Friday. Thank you very much. Mike, do we need to consider if this is coming out early next week, how that impacts the Blue Cross brief scheduling too? I know that's Monday's matter but for us it's the same briefing. We have to brief both carriers. Let me send around an email. So the thing is we have a deliberation schedule all set up internally and I am not in control of all the scheduling. So I'd like to be able to move our deliberations around a little bit and I don't know how much flexibility I have there. So let me work with Kara about that and I can send an email out to the parties in both filings about the briefing. Thank you. Thank you. Okay, anything else before we adjourn? Just one thing, typically we do closings. I think I could speak for Jay that I'm happy to waive that but I did want to recognize the chair on his public service and I can speak for MVP. How much we appreciate him extending his retirement date and helping us all in these hearings this year. Well, thank you, Gary. It's been a pleasure working with you and Jay and the professionalism is always there and I'll try not to get too grumpy as I'm trying to get everything finished on the way out the door. Yeah, Mr. Chair may not always seem like it but I've enjoyed this process. I've enjoyed your chairmanship. Thank you. Yeah, so I completely forgot about closing statements. So if you'd like to make closing statements. I'm already in slip. You'd like to do that. Please go ahead. Jay, do you want to do closings or do you want to just wrap up? I want to do closings, Gatlin, but. I'd like to do a two minute closing and you can hook me after two minutes. Okay, so I will have a closing to curry favor. My closing is going to be a minute and 45 seconds just to get it under Jay. Any decision on the final rate by the board should of course take into consideration the interrelationship of the various statutory criteria to ensure that the reduction on one criterion does not result in a statutorily inadequate rate. Four points to keep in mind as you deliberate. The first point, the board should consistently and reasonably exercise its discretion in considering the hospital budget impact rates this year. If you identify, respectfully, if you identify a hospital budget cut in this rate decision, it should be no less than what you do in September. Second point, given the evidence presented the board should not cut MVP CTR below the 1.5. Third point, the board should disregard LNE's suggested reduction of 0.6 for individual and 0.7 for small group on COVID vaccinations. But I understand that we're going to get some additional thoughts on that from LNE. So I'm not going to go on about that. The fourth point, it also LNE has to look at it further but on the large claims, we believe the evidence shows that large claims are here to stay and subsequently will not reduce in 2023 as suggested by LNE. And I understand they're going to be looking at their quantifications, but we think that those approve out that MVP is correct on that. So we thank you all for your time today. Thank you, Jay. Two numbers, a thank you and two proposed at least partial solutions. First, the two numbers. I don't want to overreact. I don't want to be alarmist, but Rome is burning. The two numbers are 25% and $1,000. 25% is a lot of money. $100 on $400, $200 on $800 each month, that's a lot of money. $1,000, the Platinum plan is already over 1,000. And even if only a lot of this increase is approved, the gold and silver plans or some of the silver plans are going to be close to 1,000. That's just unsustainable. The system's going to collapse with those levels for people. They just can't afford them. My thank you was this. Thank you for being aware of that issue, the issue of affordability and focusing on it. I don't think, well, I'll just speak it for myself. I know that I have not always focused on it. And I think it's great this year that the board really has two proposed solutions. One, and Ms. Lee talked about it is just ask L&E to give you a range for each element of the rate filing. The fact that L&E agrees that MVP has selected a reasonable number is the beginning of the process, not the end of the process. Ask L&E to give you a reasonable range. And that doesn't mean taking a low end all the time, as Ms. Lee said. But a reasonable range, and based on your beliefs as to what affordability requires, pay necessarily what MVP and or L&E has come up with tales of your hospital rate review process. And there may be very practical reasons you can't do this. But I do think, and technical and legal reasons you can't do this. But to the extent it can, I think the best thing for the system, for both the hospitals and the carriers, is to not approve the additional increment due to the hospital budget process in this proceeding, to send that message to the hospitals. And that gives you a lot of discretion, I think, in the hospital proceeding. And I hope that that would be down to the benefit of the public. Anyway, once again, thank you. I really appreciate everyone's patience. And once again, Mr. Chair, I appreciate your chairmanship and your leadership. Thank you. Before I turn it over to you, Mr. Chair, I'll call on members of the public who are with us still, who would like to comment on the hearing, on the rates. If you'd like to make a comment, please speak up. If you're on teams, you could raise your hand or take yourself off mute. Not seeing or hearing anyone. Christina, do we have anyone at our offices in Montpelier? There's no one here at the office. Okay, I'll turn it back over to you then, Mr. Chair. My apologies, Mr. Barber. If I could, one more housekeeping issue. I understand we have a new court reporter this year. Mr. Miller, it's nice to meet you. I wanted to get a sense of when that and strength will be done. And if there's any way to expedite it. I believe they've asked for a three-day turnaround. So that would mean if today's Wednesday, we'd have it over the weekend? Or does that mean exactly? It probably means Monday. My apologies for interrupting. All right. So thank you, everyone. In an informative day, a lot of hard decisions have to be made, but thank you for everyone for the passion they bring in putting out the best interests of their particular clients of the day. So with that is there a motion to adjourn? I moved. Second. Thank you. All those in favor of the motion, please signify by saying aye. Aye. Aye. Thank you, everyone. Have a great rest of the day. Stay cool.