 Okay, it's 16. I'm going to resume the MVP 2021 individual and small group rate filing hearing. Ms. Carson, could you just confirm that you're on? I see you there. Yes, I'm here, and I can hear you. Thank you. Great, thanks. Okay, so where we left off was we just finished testimony of MVP's sole witness, and now I think the next item is to hear from DFR, so Jesse Lucier will be for DFR. Mr. Lucier, could you please raise your right hand to use swear or affirm that the testimony you're about to give is the truth, the whole truth and nothing but the truth? Okay, I think as in past years, if you just want to start. Okay, can you hear me okay? Just hear me actually. Excuse me, Mike, I think Robin is in attending. Did you just get a text? I think she... I did, yep. My apologies, I got to check to make sure every board member was on, so let's wait for Robin to join us. Yep, she's going to join right now. And hearing officer Barbara, you may want to swear him in too. I just did that, but you did. My apologies. I'm running on DSL right now, so if I cut out, let me know. I have my phone on as well. I'm having a hard time hearing the witness. As am I. How about now? Better. As I was saying, I'm running on DSL, so I have relatively frequent interruptions in my service. Let me know if you can't hear me, I have my phone available to Colin. Great, thanks. I'm just taking a second to pin all my folks, so I make sure everyone's on at all times. Just give me one second. Yep. Okay, I think everyone's here. Robin, I don't see your video, but I see you're on. Could you confirm? I'm here, and my video is turned on. Can you not see? Okay, great. All set. I can't hear you, Mike. I said you did answer yes to the oath. I kind of lost track as Susan started speaking. Okay, I did. Okay, yeah, go ahead. All right, good morning, everyone. My name is Jesse Lusher. I work as an insurance examiner for the Department of Financial Regulation. I've been working for the department for about nine years now. We've reviewed the department's role regarding solvency in previous hearings, and so for the sake of time, I'm going to skip that piece unless anybody has any questions. As we've also stated in the past, insurance regulation is state-based, with every state being responsible for those companies that are domiciled in their states. MVP's primary regulator is New York. We would rely on New York to notify us of any solvency-related concerns related to MVP. With respect to our filing, it's similar to previous filings. The one noticeable exception is on the first page. The last two paragraphs deal with the uncertainty surrounding the COVID-19 pandemic. We've also discussed that on numerous occasions, so I'm going to skip over that unless anybody has any specific questions. But again, predominantly, the discussion revolves around the uncertainty of claims and deferred claims and when they might be returning back. I will skip down to the final part of the solvency opinion, which remains consistent with previous opinions. I'll just read the final paragraph. 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. I will leave it at that and open it up to questions. Thank you. Mr. Carnegie, do you have questions for this witness? I do. Thank you very much. Good afternoon, Mr. Lucia. How are you? Good. How are you? Can you hear me okay? Yes. So you're employed at DFR, you said for the past nine years. I'm fly. Correct. If you could please turn, you made reference to it. It's exhibit 11. It's the DFR solvency letter and that's dated July the 7th, correct? Correct. And you adopt this testimony on behalf of the DFR, excuse me, you adopt this exhibit as your testimony on behalf of the DFR, correct? Correct. So would you please read the summary of your opinion at the top of page two? Read that sentence underneath that heading. 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. You stand by that opinion today? Yes. And would you please read the three bullets under the MVP HP solvency opinion heading please? Sure. DFR has been in communication with MVP HP's primary solvency regulator, the New York Department of Financial Services, and has not learned of any solvency concerns. Further MVP HP currently meets Vermont's foreign insurer licensing requirements. Finally, in 2019, all of MVP holding company's operations in Vermont accounted for approximately 5.7% of its total premium written. DFR has determined that MVP's Vermont operations posed little risk to its solvency. Nonetheless, adequacy of rates and contribution to surplus are necessary for all health insurers to maintain strength of capital that keep pace with claims trends. Okay. So even though Vermont is a small percentage of MVP's total premium, you still look at its Vermont premium and this rate filing to determine adequacy, correct? Correct. Normally you'd want to see filings and rates kind of stand on their own. Okay. And this letter exhibit 11 is based on the DFR's review of MVP's original filing, correct? Correct. And it saw a contribution to reserves of 1.5% which the DFR found based on this exhibit to be adequate, correct? Correct. And you heard testimony here today, you attended this morning. You heard the testimony from MVP? Yes. And you heard that based on L&E's recommendations, MVP has decreased its rate proposal from 7.34 to 6.06. Did you hear that testimony? Yes. Do you have an opinion that this decrease in a revised lower rate of 6.06 will likely have the impact of sustaining MVP's current level of solvency? Yes. My understanding is that the, except for one component, which is maybe a half a percent, the rates have been agreed on by the actuaries. So as long as their actuarial justified, it wouldn't change our opinion. Okay. I believe they're 0.6 apart based on the testimony this morning. So that wouldn't change your opinion, is that what you're saying? Correct. And when it comes to solvency, do you believe it's a good idea to kick the can down the later years and perhaps have a lower contribution to reserves in one year, say 1% with the hope that you could simply have a contribution of 3% the next year to catch up? Do you believe that that's a good approach? Generally speaking, no. I believe you testified in prior years that the DFR review of solvency does not end with RBC that it reviews a large amount of data. Correct? Correct. And if you go to page two, please, the first paragraph under background, would you please read the second and third sentences? Whether an insurer is solvent is more complex than simply determining whether at any given moment the insurer has more assets than liabilities, rather it is an intricate analysis of many factors to discern how close or far away from insolvency the insurer is and what direction it will move in the future. So it's not just RBC from the Vermont Department's perspective and measuring solvency, correct? Correct. RBC is one component. And in this year's rate filing you have conferred with the New York regulators and they confirm their review of relevant data going to solvency? I communicated with them in June and once in July I believe the June email was asking if there were any solvency related concerns and they said no. Okay, thank you. And do you recall last year, you and I talked a little bit, but do you recall last year reviewing L&E's actuarial memorandum where they did a reasonableness check of MVP's proposed 1.5% contribution to reserves? Do you remember that? Faintly. Do you remember reviewing that document and reviewing their reasonableness check? Again, it was a year ago so I don't have a good recollection of it. Okay, let me ask you about this year. Did you review this year L&E's reasonableness check review in their actuarial memorandum? Yeah, I reviewed their memorandum. And did you find that information on their reasonableness check of CTR data nationally? Did you find that that information supported the reasonableness and adequacy of the 1.5 CTR? Yes, based on my understanding that the 1.5% is in the 80th percentile or 20th percentile meaning they're better than 80% of the other companies. And that independent analysis by L&E lends further support to the department's opinion that the rate is adequate, correct? Correct. Thank you very much. Thank you. Mr. Angolf, do you have questions for Mr. Lusier? Just a couple. Mr. Lusier, am I pronouncing your name correctly? Yeah, that's pretty good. So I should pronounce it as if it were L-E-I-S-U-R-E. I think the French way is Lucia, but in Vermont we just say Lucia. Let me just ask you a couple of questions. Number one, does Vermont have any requirements that would require MVP or any other foreign insurer to allocate a certain amount of surplus to Vermont? There are requirements for overall surplus and there's RBC requirements. I'm not aware of a specific amount allocated to a state. Okay. And you didn't make a determination as to whether or not the rate MVP is seeking is excessive, did you? No. Our main focus is solvency so that the our main focus could be whether or not the rate is inadequate. No more questions. Do any board members have questions for Bessie? No. Anyone? Okay, then thank you. Thank you. All right, I think the next witness is Jackie Lee from Lewis and Ellis. Hi. Can you hear me okay? I can. I'm just trying to find you to pin you on my screen. I need to do the same because otherwise I'm staring just at Jay. Hi, Jay. I'll give you a minute to do that. Thank you. Good. Hi, Amaran. Hi, Jackie. So Jackie, could you please state your, oh, has she been sworn in? She has not. Could you please raise your right hand? Do you swear or affirm that the testimony you're about to give is the truth, the whole truth and nothing but the truth? Yes. Thank you. Is that her daily? Thank you. Jackie, could you please state your full name for the record? Yes, it's Jacqueline Lee. And where do you work? I work at Lewis and Ellis. And what's your position at Lewis and Ellis? I'm a vice president and principal at Lewis and Ellis. And could you please turn to exhibit 15 of the binder? Sure. I am there. Okay. Jackie is working off an electronic binder, so she may get there faster than I do. I have been practicing, so I'm good. And do you recognize exhibit 15? Yes. This is the prefiled testimony that I prepared. Okay. And can you briefly describe the information contained in this document? Sure. It includes my background. It talks about the process in which we look at filings and how we keep up to date with other healthcare reform issues. It talks about our standards of review in the state of Vermont. And the file, again, I kind of already said this, but the filing process, how here at L&E, what we do to review a filing when it comes in the door. And is the information in this document accurate and correct to the best of your knowledge? It is. Is there any information in this document that you would like to change or clarify at this time? There is not. And do you wish to adopt this prefiled testimony as part of your testimony today? I do. Great. So I know you did cover this in your prefiled testimony, but for those listening today, could you briefly explain your role in L&E's review of this filing? Sure. This is a similar process that we use with most of our filings that we do at L&E. It's a process that we've used also in the state of Vermont for many years now. We have a three-tiered approach where we have an associate of actuaries do the primary, very technical review, handling a lot of the direct correspondence with the carrier. That this year was Tracy Hughes. Then we have a direct peer reviewer, which is myself making sure that I'm working with Tracy, working with the carrier on any complex issues, making sure that we're accounting for all of the various aspects of the filing. And then there's the third level, which is the high-level peer review that was done by David Dillon this year. And the main purpose of that role is one, just to have another set of eyes, but also since there are two carriers in this market, we like to ensure that there's consistency in our questions and in any decisions that we're making that they are applied equally between the two carriers and that nothing is missed over the course of the review between the two filings. And how do you submit your recommendations to the board after having the review to filing? So each filing has a pretty strict timeline. We are required on the 60th day after the filing has been submitted to provide a report and recommendation to the board based on any conclusions and findings that we have during the process. I believe that the report for this filing is exhibit 10 of the binder. Could you please turn to that? Yes, certainly. I'm there to your point faster and probably want to check on the board too, although the most most favorite exhibit that today has been 10. So we've heard some testimony today about affordability. Just to be clear, did Eleni review this filing for affordability? We did not. I'm a little bit slower. On page three of exhibit 10, it lists the standard of the review of the board, which includes multiple items that are non-actuarial in nature that the board must consider. We are primarily concerned with whether or not the rates are actually sound in which the definition includes not excessive, not inadequate, and not unfairly discriminatory. Great. Thank you. So having reviewed MVPs filing under those standards, did you make any recommendations to modify this proposed filing? Yes. On page 16 of our exhibit 10, our report, we list out five recommendations. The first recommendation is to consider updated hospital budget information. We've talked at length about this today and yesterday during the Blue Cross testimony that this year, the hospital budget submissions are later than normal. So to the extent that that information has not been properly reflected in any estimates that MVP has or has not made, that those be reflected in the final rates. The second recommendation is to reduce the COVID-19 adjustment that was made by MVP. The third is to move a re-insurance factor on the URT. This is a federally required document that is required to be submitted and it has no impact on rates, but is more of a reporting issue that we noted on our end. We also recommended to update the risk adjustment. Matt Lombardo testified that on Friday, the updated risk adjustment information was officially published. Prior to that, Eleni had done an independent calculation based on confidential data provided by both MVP and Blue Cross so that the carriers would have ample time to consider how this possibly would be incorporated into their rates. So we are recommending that the CMS values that were published on Friday be incorporated into the rate. And then finally, there is a very minor adjustment for the actual value in basically in pricing due to benefit changes as required by a form issue that was found in a different review outside of the scope of this particular review. So if all of your recommendations were to be implemented, can you explain what the ultimate projected rate increase would be? Sure. I have listed on page 16 of our report that the approximated rate change is 5.5%. However, as part of the procedure this year, one of the items we have always added in front of that is approximately because we are not the holders of all information in order to calculate the impact of any changes as accurately as the carrier. So this year as part of the process, the carriers had an opportunity to reply to our estimates and MVP replied stating that our calculation was a little bit off based on our COVID recommendations and they are recommending the rate increase be about 5.4%. So just a little bit different than ours. And do you find the 5.4 reasonable? I do. And why is that? They have more information than we do. They have the numbers out to a bunch of digits. They actually included an extra digit in the calculation of 3.5.38%. And so we rely on the carrier to ensure that if we try to be explicit in the recommendation we are making and then make an approximate estimate on how the rate would be impacted. And so we in turn ask the carrier to actually make those changes and then what the appropriate rate change would be. Thank you. If you could turn to page 17 of exhibit 10. Okay. There is a chart here that Mr. Lombardo was looking at this morning. There seemed to be maybe a little confusion about the risk adjustment line, line 10 of the bottom chart. And I just wanted to confirm with you whether the numbers in this chart are accurate. They are accurate. Okay. So any confusion over the 1.1 versus 1.2 could you? Yeah. I think the confusion lies in two places. One, a direct subtraction would be 1.1 in the situation. But if you kind of hightail back one page to page 16, we say the rates decreased by approximately 1.2. I think that that is more accurate because it's multiplicative. And the final confusion is that those that number is very similar to the original number. So I think that's where the confusion was lying in just trying to quickly estimate. But we stand by that the new recommendation is .1 and the rates decreased by 1.2. And based on the pre-filed calculation by Matt and his team at MVP, they agreed with that. So I think we are good. Thank you. You also stated in your pre-filed testimony that you review several ACA filings in a year. And I was wondering if you could give us a brief summary of what other carriers are assuming regarding the impact of COVID-19 for plan year 2021. Sure. We have seen a wide variety of impacts that are also changing by state as the virus has impacted states very differently. So that's one thing I want to point out is that we did do a lot of review during our actual analysis to really incorporate Vermont. But as to other filings, I would say majority of the carriers are assuming between zero and 3%. We've had some outliers that have included some that are higher than 5%. But that's really been primarily focused on one parent organization and all its affiliates that are filing that relatively high outlier. So I would say that's what we have seen to date. And turning to this filing, what was Eleni's recommendation in the report regarding MVP's assumption for the impact of COVID-19? We recommended two changes. I'm flipping back to they start on really page nine of our exhibit and then go forward into all the way through page 11. But the primary recommendations we make are regarding the pent-up demand. We disagree with the assumption that there will be pent-up demand in 2021. Therefore, we have recommended that this be reduced to 0%. We have also made a change to some of the assumptions made regarding the vaccinations and the costs that MVP would incur during 2021. We felt that the assumption of 80% of the MVP's population would be vaccinated within 2021. We thought that that 80% was not adequately supported. Therefore, we recommended a reduction to that as well. The combined reduction of those two is where our calculation is different. I believe it de-increases rates 0.6% versus what we have quoted in our report as 0.5%. So I think that's where we were slightly off. Okay. So since your report was issued to the board, MVP has submitted some more information about its COVID-19 assumptions in their pre-file testimony. And I was wondering if you'd had a chance to review those post-memo submissions. I have. It was submitted pretty late on Friday, but I took some time over the weekend to look through all of the extra exhibits and most of which were included and stipulated earlier in today. Including Mr. Lombardo's pre-file testimony. Correct, yes. And were you listening to all of the testimony today so far? Yes, I was. So having reviewed those submissions and having heard Mr. Lombardo's testimony, is there anything that you wish to amend or add to Eleni's recommendation around the COVID-19 impacts? No, I do not wish to change any of our recommendations. So turning briefly to contributions to reserves, which has been a discussion that's gone on a lot today. In the analysis for your memo, do you review for solvency and contribution to reserve? Yes, we just heard from DFR. They do the primary review and really dive in deep about all things regarding solvency for each of the carriers. However, since it is an assumption within the rate development, we do look at it. And our report goes into some of the reviews that we perform to make sure that the assumptions are not out of line with what we're seeing in the industry and don't threaten solvency such that it makes the rate inadequate. And so did you hear in Mr. Lombardo's testimony that the carrier is asking for a 1.5% contribution to reserve for this filing? Yes, that's correct. And I heard that this morning. And do you find that assumption to be reasonable and appropriate? Oh, yes, I do. So 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 your five recommendations we've covered so far? No, I do not. And if your recommendations, as of today, are implemented, do you believe that rates would be excessive? No. No. Do you believe they would be inadequate? No. And do you believe they would be unfairly discriminatory? No. I have no further questions at this time. Okay, thank you. Mr. Carney, do you have questions for Ms. Lee? Gary, you're on mute. Well, that would have been a great way to ask your questions. I thought so. I thought it was a good start, although I was panicking on my end that my headphones went out or something. If you would go to exhibit 10, please, at page 17 of that exhibit, let me know when you're there. Are you there? I am. Okay, so there's the table at the bottom that has 16 rating components, correct? That's correct. And based on your report and the subsequent testimony filings by MVP and what you heard today, it appears that MVP and L&E agree on 15 of these 16 rating components to identify, correct? That's correct. We only disagree on item number four, which relates to the COVID, correct? That's correct. And this July 7th letter is a recommendation by L&E to the board on MVP's proposed rate increase, correct? Yes, that is the purpose of our report. And you're recommending that the board approve MVP's rate increase proposed today, with the exception of the COVID difference you have with MVP, correct? Sorry, say that again, please. Sure, let me do it slowly. Yes, sorry. And L&E is recommending that the board approve MVP's rate increase proposed today with the exception of the COVID difference of opinion that you have with MVP, correct? I'm recommending that they incorporate all of the changes we have recommended. Does that answer your question? I think so. Okay. The one thing we, I think, and we'll talk more, but the one thing we disagree on is COVID, everything else basically there's agreement, correct? Correct. That is correct, yes. And if you go to page three, please, of exhibit 10, page three, let me know when you're there. I am there. And do you see the standard of review? And there's a paragraph below that cites to the statute and the rule and lists all the various criteria. Do you see that? Yes, I do. And it's my understanding that you apply this standard of review and providing your opinion, but it's primarily focusing on those factors that are actuarial in nature. That's correct. And would you agree with me that the statutory items listed under the standard of review are interrelated that the board's decision on each of them all ultimately impact the total rate increase amount? Yes, that's fair. So said another way, if the board reduced the proposed rate by say 5% on the statutory ground that it was excessive, that reduction could impact the question of whether the proposed rate is statutorily inadequate, correct? That's correct, yes. And when you consider, for example, excessive or inadequate, we're considering whether the final total rate increase is excessive or inadequate, correct? That's correct, yes. So if the board reduced the final rate by say 5% based on a non-actuarial statutory criteria, such as affordability, that could make the proposed rate that you had identified as adequate, no longer adequate, correct? Yes, that's correct. So these statutory factors are all interrelated, aren't they? They are. And if the rate with that 5% reduction became inadequate as an actuary, you could not support that change as actuarially appropriate, correct? That's correct. So let's talk about what we have agreement on this year. And I think you went through it, I just want to confirm it, and that's the agreement on math. If you go to your pre-file testimony, exhibit 15, and go to page 6, line 21, there with me, I'm trying to shorten this a little bit because you said a lot of things we already talked about. Yeah, I'm there. Okay, great. So the last three questions relate to your proposed rate of 5.5 and the reduction to 5.38, correct? I believe that's on page 7. Yes, 6 going into 7, pardon me. Okay, oh, I'm sorry, yes. Okay, I see that now. I'm just trying to be general now because I think you've testified a lot of this. And MVP is recommending a 6.06 rate increase, correct? Yes, that's correct. Based on today's testimony. Right, and L&E is recommending a rate increase of 5.38 this year, correct? I prefer 5.4, but sure, and I need to be too precise. That's fine. So we have a delta of around 0.6, I think you testified to, is that right? Yes. And that relates to this COVID disagreement we're talking about, right? That's correct. And before we get there, I want to talk about something else that we appear to have agreement on, and that's administrative costs. Would you go to exhibit 10, page 14, please? And let me know when you're there, you see item 13, which is changes in administrative costs? Yes, I'm there and I see it. So you referenced that MVP, MVP, excuse me, MVP is proposing a 43.75 pmpm, correct? Yes. And would you go to the, turn the page and would you please read the first full paragraph that starts with the administrative costs? The administrative costs assumed in the 2021 filing are consistent with MVP's recent individual and small group administrative costs as reported in the last three years of the company's supplemental healthcare exhibits. The company's expenses have decreased since 2013 when they were $46.57 pmpm. Okay. So that number compares to the 43.75 for this year's rate point, correct? Yes, it does. And you stand by what you just read in that paragraph? I do, yes. Would you please read the second full paragraph? Please read that. Eleni notes that while enrollment in Vermont has been increasing, MVP's overall enrollment, including enrollment in New York decreased by 4% in 2018, decreased by 4% in 2019, and decreased by another 1% as of March 2020. Many of the administrative functions are shared between Vermont and the much larger New York block of members. Therefore, the increased membership in Vermont does not directly result in a decrease in administrative costs. Considering the reduced administrative costs over recent years, Eleni considers the assumed 2021 administrative costs to be reasonable and appropriate. And you stand by what you said in that paragraph? I do. Okay. Next, I want to turn to hospital budgets. If you go to page seven of Exeter 10, please. Page seven. Okay. So as I understand it, the first part of this under medical unit cost trend is you summarizing MVP's assumptions about hospital budgets. Is that fair? That's correct, yes. And would you please read in the second paragraph the first two sentences? Since the 2021 hospital budget review is not yet finalized, MVP has assumed that hospital increases will match the 2020 increases with a few exceptions by facility. These expected assumptions for the hospital budget increases are based on information from MVP's contracting department. The overall increase for hospital-based costs differs from the board's Vermont wide projections for several reasons. Do you want me to read them? Okay. No, no. I mean, thank you. But generally you go on to summarize MVP's hospital cost data, correct? Yes, we do. And then would you read the last sentence below the box to the left that starts Eleni? Eleni believes the assumed unit cost trends are reasonable and appropriate. So MVP's assumptions on hospital budgets are reasonable and appropriate, correct? Yes. And then if you go to page eight, please, and there's a paragraph with a heading on it, total allowed medical trend. Do you see that? I do. Would you read the sentence underneath there, please? Based on the information available, Eleni considers the total allowed medical trend of 7.0% to be reasonable and appropriate. You stand by that, correct? I do. So you have agreement with MVP on that, correct? Yes, we do. And then if you go down under that heading, the next paragraph, which starts if updated, would you please read the last two sentences of that paragraph? Due to the disruptions from COVID-19, it appears likely that the submitted hospital budget request will be higher than last year. If this is the case, it may mean that a higher premium increase is necessary. So Eleni is indicating that the COVID-19 disruptions may require a rate increase higher than what is being requested, correct? For the hospital budget submission and unit cost, yes. Well, my question goes to the overall rate. Aren't you saying that it may mean that there's higher premium increases necessary? Is that what you're saying? Yes, we're saying that if the hospital budgets come in, that would increase the unit cost, which would therefore increase the total rate. Sorry, thank you. That's not helpful. So the rate could be, if that happens, as you described, higher than your 5.4, correct? 5.4. Yes, it could be higher, yes. And it may be higher than MVP 6.06, correct? That's correct. Next, I want a confirm agreement on CTR and testing costs. If you go to page 15 of exhibit 10, and I believe it's item 15, you see the heading, it says changes in contribution to reserves. You see that? Yes, I do. MVP is looking for requesting a 1.5 CTR this year, correct? That's correct. And would you please read the first sentence of the last paragraph on this page? The L&E believes? Yes, please. L&E believes the CTR and bad debt assumptions are reasonable and appropriate. Additionally, L&E recommends that any solvency analysis performed by the Department of Financial Regulation be considered. So we have agreement on the CTR between L&E and MVP this year, correct? Yes, we do. You also make a reference to bad debt. As an actuary, you concluded MVP's bad debt assumptions are also appropriate and reasonable, correct? Correct. I wonder if you could, if you go back up, this is again under number 15, the second paragraph talks about a reasonableness check. Do you see that? Yes. Would you please tell the board about your reasonableness check as it relates to 2018, 2019, and 2020? Sure. The Center for Consumer Information and Insurance Oversight, also known as SOSIO, has public use files with a lot of various information in it. We reviewed over the last several years the information for the QHP filings that comes from that. So in 2020, we reviewed 783 QHP filings. And what we found was for, this is for 2020, the average submitted CTR was 3.45% and a median of 3.24%. Based on this, MVP's requested CTR of 1.5 would rank 630th out of those 783 filings. We had similar findings for 2019 and 2018 that you can see in those reports and you can see the details in those reports if you pulled them up. But here we've outlined that in all instances, MVP's request of 1.5% was in the lower bound of all filing submitted regarding QHP. Thank you. As an actuary, you want to be conservative considering CTR so you set aside sufficient money. Is that fair? That is fair. As an actuary, you don't want to set aside too much or too little, correct? That's correct. You're trying to strike the best balance. And you don't want to be an outlier on a bell curve in terms of contribution to reserves, right? No, you don't. So, Misley, you're from Texas, correct? I am. And I think I know that because on direct exam, you said, oh, what was the phrase you said? I tell it back. You said, I tell it back. I did say that. I thought that sounded a little too southern. Sorry. Don't be sorry. It's straight. Okay. Now, in Texas, we've seen an uptick. Have you seen an uptick in the people contracting coronavirus? Unfortunately, we have. And an uptick in the testing in Texas as a result? Yes. And Vermont has been hit less hard by coronavirus, correct? That is true. Yes. But if we see a surge like Texas, we would need more testing in Vermont, correct? That's true. Yes. You agree with me that MVP did not include testing costs in its rate increase request, correct? I agree. That's not included. But if, in fact, testing does increase, that would be an added cost that was not factored into the rate increase request. Am I right? If it's covered by MVP, yes. All the more reason to support a CTR of 1.5% rather than some lesser amount. Would you agree? That's correct. Yes. Would you agree with me that Vermont has the best doctors in the country? No. But I'm sure they're wonderful. I'm sure they're great. Yeah. Would you agree with me that Vermont has terrific caring doctors? I would agree that there are terrific doctors in Vermont. Thank you. And you would agree with me that I guess I won't ask you about the best hospitals in the country. But would you agree with me that Vermont has terrific caring hospital healthcare providers? There are terrific hospitals in Vermont. And the people who work there who provide healthcare are caring people, correct? I do not know the people who work at those hospitals. I'm not sure Ms. Lee has personal knowledge of the doctors in the state of Vermont. I, you would agree with me that medical care of their patients is first and foremost in the minds of healthcare providers in Vermont. I don't know the answer to that. Same reason. And I need to establish that she has some knowledge of the things that you're asking about. You would agree with me generally based on your experience that healthcare providers have their patients care first and foremost in their minds. Also the times I would like to hope so. You would agree with me that if a doctor has identified the need for a surgical procedure, they're not going to make a decision about when that procedure will be performed based on how much money they are making at a given moment. Objection. Asking the witness to speculate what doctors would do or not do. Sustained. Would you agree with me that questions that Ms. Lee has knowledge of or Would you agree with me that medical doctors aren't making medical decisions on timing of procedure based on the rise or fall of their stock? Objection. Asking the witness to speculate. Sustained. The witness in evidence that's in evidence has indicated that doctors are considering receipt of government assistance impacts her opinions. I think these are fair questions. You can ask her about the basis for her opinion surely but I think you were getting into speculation. Well let me let me ask another question then. Would you agree with me that a medical doctor or hospital making a decision on the timing of a medical procedure isn't basing that decision on whether they're receiving government financial assistance? I don't know. So if you would go to exhibit 10 page 10 I'm going to read you the first bullet. Providers have had an opportunity to receive financial assistance from the government to alleviate financial hardship which reduces the financial incentive to run a greater than 100 percent capacity in the future. Did I read that correctly? You didn't. So that is an incorrect statement. You don't know. That was in direct response to an inauguratory which is found in exhibit 2A that we asked MVP. It's on exhibit 2A page 3 where there is a list of an entire list of reasons how the doctors are financially incentivized. So we are saying that there were other factors at play. That's what we were saying. So this isn't based on on your knowledge or your data. That's what you're saying. It's something that MVP told. Is that it? It is based on a an argument that MVP made about the reasons for operating at 110 percent of capacity. And you you heard Mr. Lombardo's testimony this morning about health care providers wanting to provide care as soon as they can for their patients. You heard that right? I heard that. And do you disagree with that? I'm not sure that that was placed in that was not a response in direct when we asked that question directly earlier as I stated in the first question. But I don't overall disagree with it. But I that was not what was the original argument that was posed. And this was our response to that argument. I'm just asking whether you you heard him and you said you did testimony today and whether you generally agree with the notion that health care providers want to get people treatment as soon as they can. Generally yes. Would you agree with me that individuals are not charged for a delayed elective surgery until the surgery surgery actually occurs? Correct? That's correct. Yes. If your surgery is scheduled for 2020 but doesn't occur for whatever reason until say March of 2021 you didn't get billed for it or you don't get billed for it until after the surgery in general. Right? You're billed generally based on date of service with a few exceptions. They provide the service and then you pay for it. Right? That's correct. Yes. And you'd also agree with me that formulating a total allowed medical trend for 2021 MVP should be considering all the claims for surgeries that will occur in 2021. Correct? That's correct. Yes. Each year we do these rape filings. Question before the actuaries is what will happen in that great year in this case 2021? Correct? Correct. 2021. It's a question about that 12-month period, isn't it? Yes. That's correct. Okay. So now let's talk about the flu vaccine issue which we I think have a friendly dispute on. It's the COVID vaccine. Well, we'll get there. Okay. You go to exhibit 10, please. You go to page 11 and I want to go to the third full paragraph. Let me know when you're there. L and E recommends that. That's fair. Let me I want to read that first sentence to you. L and E recommends a vaccination rate assumption of 55% consistent with flu vaccination rates. Did I read that correctly? You did. Yes. And according to the second sentence the difference of opinion on this vaccine rate amounts to 0.3%. Correct? Yes. That's correct. So where we have a roughly, I know there's rounding, but where we have a 0.6% dispute this year half of it is on this vaccine issue. That fair? Yes. That's correct. Yes. That's a fair statement. And where the sentence, the first sentence I read says consistent with flu vaccination rates, that's the 55% rate for flu vaccinations. Right? That comes from the CDC. Checking our footnote. Yes. The CDC. Great. So your 55% is based on aligning with a flu vaccine. Correct? Yes. You didn't reduce it below the 55% flu vaccine rate because of assumptions you made on any restrictions on supply once the COVID vaccine is available. Correct? No, that was in part of the reason. We didn't think that the 80% had enough. We thought it was too high. And so one of the reasons we came up with the flu vaccine was because it's one of the wide vaccines that you get frequently, commonly each year. And we were worried about supply issues being one of them. We were also worried about the quoting of early 2021. There was a lot of considerations that we made, but we ended up landing on the flu vaccine. Okay. You say that, but the number, the 55% aligns with the flu vaccine. Correct? It does. It does, yes. You didn't go below it. You didn't go to 54%, did you? Or 53%, correct? No. You just aligned with the flu vaccination rate to come up with a 55%, did you? Yes. Now you disagree with MVP's assumption that 80% of the cover population will receive the vaccination in 2021, correct? Correct. You believe it'll be the 55% that we just talked about? In 2021, yes. Yes. And that relates to the flu vaccine, right? Still does. Okay. I appreciate your patience. Yeah. Have you seen the news each day how many people are contracting the coronavirus in Texas, in the country, and in the world? I'm most familiar with Texas and Vermont these days, but generally speaking, yes, less so the world. It's scary, isn't it? I'm sorry, I didn't hear your response. I'm sorry, yes. Have you seen the news each day how many people are dying from the coronavirus in Texas, in Vermont, in the country, and in the world? Roughly, yes. That's scary too, isn't it? It's not good, no. I wouldn't define it as scary, but... Well, people are dying, correct? Correct. Have you seen in the news each day how many people are contracting the flu in Texas, in Vermont, in the country, and in the world? Since it's not flu season, no. Have you seen in the past year information in the news about people contracting the flu in Texas, in Vermont, in the country, or in the world? In Vermont or in Texas, yes, I do see it on the news. Have you seen in the news each day how many people are dying from the flu in Texas or in Vermont or in the country or the world? I have researched that, yes, but I wouldn't say that I see it in the news. I'm not sure what you're trying to get at, but I am aware that a lot of people do die from the flu. That wasn't my question. It was whether you saw it in the news, and I think the answer was no. In the news? No. Are you working, excuse me, when you talk with co-workers and family about daily events the past few months, are you talking about the COVID pandemic or the flu? COVID. Are you working remotely? Yes, you like my office? Lovely. I like the tractor behind you there. Dang, you can see it. It's my husband's. Are millions of Americans, including Vermonters, working remotely? A lot of people are working from home. I don't know the exact quantity. Are we working remotely because of the COVID pandemic or because of the flu? COVID pandemic. Is the concern and why you're testifying remotely today the flu or the COVID pandemic? The COVID pandemic. Wouldn't you agree with me to the general proposition that Vermonters are more scared about contracting COVID than they are about contracting? That's probably fair. Wouldn't you agree with me that Vermonters are generally more scared about dying from COVID than they are about dying from the flu? Yes. If you would please go to exhibit 15, which is your pre-file, and go to page three. I'm going to ask you a few questions and I would just reference, see how there's the little numbered lines to the left? Yes. Great. So first is generally you, like David Dillon, or a principal of L&E, correct? Yes. And you're a fellow of the Society of Actuaries, excuse me. Yes, that's correct. And he is too, right? He is too. And I'm referencing line 12, but I'll just ask you. You're the chair of the SOA health section. I am. Looking at line 13, you're involved in the SOA COVID-19 education and distribution of information, correct? That's correct. And you hold David Dillon in high regard. I do. And he signed off, in fact, on the actual memorandum, which is exhibit 10. It's his signature on the back of it, right along with yours, correct? Yes, that's correct. Yes. In all the years you've worked with him, has he ever held an opinion that you felt was not actually sound, reasonable, and appropriate? No. If he authored something, you would agree with his opinions being actually reasonable, correct? I would agree with that. And he was recently one of the authors of the recent, recently released June 2020. It was released in June of 2020. It's called the 2021 Health Care Cost Model. And I think you make reference to that here in your pre-fund, correct? He was not an author. He was on the Project Oversight Group, which means he was a peer reviewer. The authors, I believe, were Wakeley and Noborest. His name's on the document, correct? Yes. Okay, so let's go, let's go to that exhibit then. It's exhibit F. This lady, do you have that, Andy? Exhibit F. I do. All right. And have you seen this document before? Yes. This is the 2021 Health Care Cost Model that I just referenced, right? That's correct. And if you go to page two of this document. Sorry, page two? Page two. At the very top is Dave Dillon's name listed, although they spelled it wrong, apparently. Let me know if you see that. He goes by Dave Dillon sometimes. All right, well, all right, well, sorry, sorry. I don't know. You started echoing a bit. So let's go, please, to page 110 of the document, please. And you see where it says the main effects of the outbreak on health care services is section three? Yes. Would you please, in the second full paragraph that starts with us, I would ask you to read the second sentence that says, in the coming months, could you read that sentence? In the coming months, however, as social distancing policies are relaxed, utilization of elective services is likely to increase and may temporarily peak above normal historical levels as providers and patients reschedule some of the services that were previously postponed. So it says utilization may peak above the normal historical levels for a period, right? Yes. Would you go to 114, please? Let me know when you're there. I am there. You see there's two paragraphs below that table. Would you read the first sentence that starts across of the first paragraph? Across, I'm sorry, I'm reading the first sentence or the first two sentences? No, just just the first sentence. Across all scenarios related to a baseline in which the outbreak never occurred, the projected health care costs decline in 2020 related to the baseline, but rebound in 2021. Table five. Thank you. So the SOA in this report is indicating or this model is indicating that they're expecting a decline in 2020 followed by a rebound in 2021, correct? They are with the one exception of successful suppression, which does not have rebound in 2021. That would be number one, also the blue line. Did I read the sentence correctly? You did read the sentence correctly. I think I had you read the sentence. Yes, I read the sentence correctly. That's all the questions I have. Thank you. Thank you very much. Thank you. Do any board members have questions for Jackie? Oh, sorry. Mr. Engoff, your turn. Thank you, Mr. Herring officer. Just a few, Ms. Leigh. Good afternoon. Good afternoon. Were you here this morning to do hear Mr. Lombardo testify? I did, yes. Okay. And do you remember that he testified that he had a hope that there'd be a vaccine available in 2021? I assume you share that hope. Objection. He didn't say just hope. I think that's a mischaracterization of his testimony. Could you restate the question? Yeah. I assume that you heard Mr. Lombardo testify this morning. And I assume that you heard and testified that he had a hope that there would be a vaccine available in 2021. And objection. What was your understanding of the witness's testimony this week? Me? You said me right. I understood that they were assuming that Mr. Lombardo was assuming that there would be a vaccine in early 2020 to the best of his knowledge and research. Early 2021, correct? Sorry, early 2021. Sorry, yes. Okay. And he testified that MVP was including a component in its rape filing that would charge people based on the assumption that a vaccine would be available in 2021. Correct? Yes. Okay. And do you accept that assumption? That there will be a vaccine in 2021 or that there should be? I think there will be a vaccine in 2021. You do. And then what do you base that assumption on? Similar research that Mr. Lombardo included in his initial filing as well as our own. And I also, I know he did say that we all hope that it comes. I do hope that it comes. I just am less optimistic in the early, though I hope I'm wrong. You're less optimistic. I'm sorry. You're less optimistic than what? About the early 2021. Ms. Lee, in the course of your review of this filing, did you ask MVP to submit paid claims data for the year 2020 by month to the extent that it was available? We did. We have a couple of places where we asked for that. Would you like me to point them out in the binder? Yes, I certainly would. Oh, I'm in the old binder. Okay. So in the binder, if you go to exhibit 2A, which is confidential, it's a confidential exhibit, though I believe this is a safe area, maybe it was, sorry, maybe it was 2. Let me double check. Okay. So exhibit 2, page 8 and 9, you can see that we asked about emergency department development and they talk about the average claims in March 20, March 2021. I did find another example. Let me find it real quick, where I had monthly data a little bit closer to what you're talking about. However, we only, we asked for it through March and they were only able to provide it. Okay. I am, oh goodness, I believe I am in exhibit, oh no, that's not the right one, but that is the, I do have, they did provide it through February. It was normalized to help us work with the utilization trend and I thought I had written it down correctly, but I apparently didn't and I apologize for that. Okay. Here we go. No, that's not it either. I also have listed exhibit 5, pages 3 and 4. Let's go. So we did ask for it. They were only able to provide it on a monthly basis by for, up to February though, because they said they could not provide the past March. So they only provided paid claims data for January and February of 20. That's correct. Okay. And that paid claims data all occurred before the coronavirus pandemic hit, correct? Yes, that's correct. Okay. And you would expect that their paid claims data would be substantially lower in the months of March, April and May, correct? Yes. And that exhibit 2, page 8 and 9, kind of shows that it's more, again, from an emergency room department, but that's again where, you know, to kind of understand, we asked that question. And then exhibit 5 also dives into kind of what they were seeing from a lowered standpoint. And then Mr. Lombardo and his testimony this morning also talked about the lowered numbers. And I believe March, April and May. Okay. But you didn't ask them, did you, for total paid claims data by month after February? They said they couldn't provide it after February. We did ask for March at the time, and they said they couldn't provide it. So sort of, we did, but they couldn't provide it. Okay. And fine. Could you turn to an exhibit 10, page 8, please? Okay. And you see the paragraph on top is talking about utilization trend, correct? Yes. Okay. And could you please read the first sentence? This produced? Please. Okay. This produced a wide, very wide range of forecasted utilization trends with a 10th percentile of minus 7.6%, a mean trend of zero, and a 90th percentile of 4.9%. Okay. So based on that, based on this wide range of utilization trends, do you believe that a trend, that's selecting a trend in the middle of that, those extremes, either the mean or the medium, would be a reasonable selection? No. Why not? Well, number one, that was based on MVP's analysis. We just had access to it. We then did some other analyses, which are the following paragraph that we outlined to talk about what we looked at. And again, MVP had a slightly different approach than we did. So we came up with several different results. And so therefore, no, I would not agree with that top sentence, which is why we didn't recommend they reduce their utilization trends to say zero. The trend that they recommended, which you agreed with, was 1%, correct? That's correct. And that was their trend that they used, and that was the trend that was approved in the last filing, correct? That's correct. And that 1% was not what they originally filed, but rather what you recommended, correct? Will you clarify which filing we're talking about? Yes. In last year's filing, isn't it true that they assumed a 0% utilization trend? Yes, that's true. Okay. But you thought that 0% utilization trend was too low, so you recommended a 1% trend, correct? That's correct, yes. Okay. And could you read the first bullet on page 10, please? I'm sorry, first bullet on page eight of exhibit 10. The three-year average annual utilization trend was approximately 0.0%. Okay. And based on that bullet, you still don't believe that a 0% trend would be reasonable in this case? No, I don't. Okay. Could you turn, please, to exhibit five? Are you there? Yes. Okay. Then, Ms. Lee, your responsibility in this proceeding is limited to determining whether or not a rate is excessive, inadequate, or unfairly discriminatory, right? That's correct, yes. You're not opining on whether a rate is affordable? No. You're not opining on whether a rate promotes quality care? No. You're not opining on whether the rate is good overall policy, correct? No. Okay. Could you read on page four of exhibit five question nine? This is a question that you asked to MVP, correct? Correct. This was a question we asked. Okay. Could you read that question, please? Describe how Vermont consumers were considered in light of the current savings due to COVID-19 pandemic and this unprecedented time. Okay. Could you please explain to me what relevance that question had to whether a rate is excessive, inadequate, or unfairly discriminatory? It would answer the question of whether or not they were excessive if they wanted to consider how recent events are changing or if they wanted to pose something that was affordable. Well, how does it, I understand what you said about affordable, but that's, but you're not considering this an actuary. You're not concerned with affordability, correct? That's correct, but we act on behalf of the board and I know that this is a question that the board would have liked to see the answer to. So we are also allowed to ask questions that have, that are under the standard of review, but our recommendations do not have to follow that same standard, the expanded standard of review, but that doesn't mean that we can't ask that because we know that the board has to make decisions based on that and we are the primary vehicle in which questions are asked. And so therefore we've been asking these types of questions to all the carriers that we have. Okay. You didn't ask questions, did you, about the adverse effects that a rate increase would have on Vermonters, did you? No. That's all the questions I have. Thank you very much, Ms. Lane. Thank you. Many board members have questions for Jackie? I do. Okay. Me as well. You go first. Is that okay with you, Mr. Hearing Officer? Sure is. Okay, great. Jackie, could you just turn to exhibit six, page two? Page two, certainly. Okay. I am there. Okay. This is the subject of questions by both Maureen and I this morning. And I'm wondering, you know, the question was about the large discrepancies between the actual pharmacy trend and the expected pharmacy trend, whereby the actual trend was significantly lower than the expected for several years in a row. And we heard some testimony from Mr. Lombardo. I'm just curious as to your reaction to this table and how we should interpret it and how we should think about pharmacy expected trends going forward since they've been so far off in previous years. Yeah, this table definitely shows that there over the years have been a deviation between the two. However, I would say from based on my knowledge, the actual trends that MVP has seen are extremely low for pharmacy trend in the industry. And so I would feel uncomfortable and kind of back to actuarial soundness, approving and, you know, a proposed trend of 3.6, let's say, for example, to be consistent with the most recent year, because I don't believe that's an accurate representation of the future. I do agree, though, that it calls into question kind of the overall methodology and thought process of, you know, how they're getting those trends. But again, I would feel very uncomfortable approving a trend this low in the pharmacy realm just based on industry standards. And even the other, you know, carriers too involved in this, it makes it difficult to approve something this low. But if it's just one year, I can understand it might be an anomaly, but it's year after year after year. And so there's something different about the population. Do industry standards not apply to this population? I mean, at what point do we say the actual experience of MVP has to trump the industry? You know, how many years do we have to see this before we say, okay, let's look at actual experience? Yeah, I think that another thing I would add to that is credibility as a concern. They've not only like you could look over this, like combine all the years. And to your point, the result would show that it was significantly lower the actual, even if you combined all the years together. However, they did experience a lot of growth over these time periods. So I would still call into question some credibility. And I would think that you would want a little bit more time because their population has changed so significantly over the last couple of years. But I do think if this continued into future years, that would definitely be a question I would have. Maybe even looking into how the PVM is looking at their trends, because I think I get a lot of information from them. But again, if you're thinking about Vermont, I question the overall, even if you combined the entire QHP block in Vermont, you're talking about just pharmacy, which is generally speaking 20%, which makes a small amount even smaller. So, but I agree. But there is one year where they were pretty close. But that was the longest time ago. Right, it was. And it was when they were extremely small because back then they had a much smaller market share for sure. So you wouldn't make any adjustments for this year based on this chart? Based on this chart alone, no, I would not. Is there any additional information that you would need to make an adjustment based on what we're seeing here? I mean, I think we dove into that given, you know, we obviously asked this question and they responded and we reviewed what they were talking about. But I mean, they even say up there that they've had a lot of membership growth. And I do tend to rely on trends from PVM versus looking at actual to expected because that can cause problems. But if you really wanted to dig into it, I would want to really dive into what is the PVM? How is the PVM calculating it? What type of population is it using? How big is that population? How many years are they looking at? You know, you've also got specialty as a concern over the years. It's continued, you know, it's been large for a long time now. But those are the types of things I would dig in more deeper if you wanted to go down that road. Okay. My second question is both carriers have acknowledged that there are significant cost savings associated with increased telemedicine usage, largely through this reduction in ED and urgent care center usage. The other carrier testified yesterday that they have included this cost savings in their filing in their trend calculations. This morning, Mr. Lombardo testified that he did not. He assumed that there would not be an impact in 2021 that would revert back to pre-pandemic usage. So as an actuary, how might you adjust this filing to account for the acknowledged cost savings associated with telemedicine usage and increased telemedicine usage? Yeah, I would definitely consider it from potential savings for emergency department reductions. However, I do believe that some of those have returned, unfortunately, unlike what we would have anticipated. But the other problem that I see with telemedicine and while you want to be able to decrease rates for it, typically it's reimbursed at the same rate as an office visit. And the entry to barrier, the barrier to entry is quite small. So utilization can actually be higher because now you don't have to take a half day off work to go to the doctor. You just get in the waiting room and on your cell phone and pick it up. So what I've done and Tracy, who's on this call, wrote an article about telemedicine is that there's not a significant cost savings aside from that emergency department. And if that's not being seen or reflected, being seen, then I don't know that it should be reflected in the 2021 rates. Thank you. Robin. Thank you. Hi Jackie. You were involved in reviewing the Blue Cross Blue Shield filing as well, weren't you? Yes, that's correct. So you're familiar with the approach that Blue Cross took and the assumptions that they made in relationship to the COVID-19 cost? Yes. They in fact had a zero rate increase attributable, is that right? That's correct. Did you find or did L&E find that approach to be reasonable? We did. So let me give you a hypothetical. If MVP had taken the same approach and included a zero percent rate increase, would you have found that to be reasonable? Yes, I do. In terms of the hospital budget filings, are you expecting to have the board's approved budget filings by the time decisions are made in this rate filing? No, we will not. So we'll have what the hospitals have submitted as a request, is that right? Yes, that's correct. So when your prior reviews of the budget impacts has the board typically approved the budgets as filed every year? No, they are not typically approved as filed. Thank you. Thanks for all my questions. Maureen? Yeah, just one question. If we talk about administrative costs and if insurance carrier only had one book of business and the book of business grew by 20 percent and fixed costs were fixed, half of the administrative and the rest was variable, would that generate about a 10 percent reduction in administrative costs? I think if I followed your math correctly, I think so. I think you said a 20 percent increase and then half of that would be attributable to then I think, yes, what you're saying is not quite 10, but it's okay. That's my thought. Thanks. Tom? I was just looking something up. I want to follow up on Robin's question about the proposed hospital budgets and that we will not have decided by the time necessary what the actual budget will be, but I do want to note that our budget guidance for 2021 does specify a target of three and a half percent. That does give some sense and the board has voted on that. Yes, hospitals will be submitting their budgets as they will, but we have set a target. Whether or not we stick to it is another issue, but it's all up to conjecture on both sides, I think. Mr. Chair? No questions. Amron, do you have any redirect? Yes, I do. Thank you. Hi, Jackie. Could we move to back to exhibit 10, page 10? Yes. Oh, maybe I don't mean page 10. Sorry, I lost my place here. Page 11, I apologize. Okay. So you were asked some questions on cross about the L&E's use of the flu vaccination as an estimate, and I was wondering if you could explain a little bit more about why you felt the flu vaccination would be a good comparator for this assumption? Sure. The 80 percent that MVP assumed in their original filing was based on a report published by Wakely. We definitely thought that at the time that was one of the first to come out, but it was very illustrative in nature, which was why we did separate analysis on what would we have assumed if we were in MVP's shoes about what the vaccination would look like. So we went about many different scenarios in our minds as well, as I'm sure MVP did, and we also utilized the SOA model when it was published. It was published after the submission of MVP's filing, but it did come out in middle of June. We looked at that, we looked at some varying assumptions about what percentage we would put in there based on when a vaccine would come into play. We also had a significant concerns about the supply of such vaccines, that vaccine being able to be widely available in early 2021, which is what they had indicated in their filing. So we went through all of that and then basically came to an assumption that was very close to the 55 percent, which also correlated with the flu vaccination rate. And so based on all of those things that we just settled on, the flu vaccination rate. So when looking at this issue, were you comparing the flu as a virus to COVID-19 as a virus from a health perspective? No, I mean, there are similarities, but obviously we know much more about the flu. But no, it really wasn't a direct comparison between the two viruses and how the two viruses have handled one another. No, it was more about trying to find the best assumption for the rate in which people would be vaccinated. And could you talk a little bit more about what the supply concerns might be? Sure. I mean, we I think we've all been a part of where's the toilet paper. Now we don't have masks. And I just think it's very obvious that there's going to be issues with being able to widely make this widespread. In the earlier cross, it was about, you know, the whole world has been impacted. So we're not just talking about just the United States, we're talking about the entire world. And from our research and our learnings of it, there's going to be a priority system that comes out making sure that, you know, the people who are in the greatest need and the higher risk categories are going to get the vaccine first. So as of right now, that would be the older population, it would be, you know, like the Medicaid population, Medicare population would be first, then you would have probably healthcare workers in that and then even further likely the those with underlying conditions. But the young and healthy individuals are going to be last on that this list. And additionally, MVP does have the younger and the healthier members based on the risk transfer assumption and adjustment that they end up paying out. So in general, we thought it was really aggressive to assume 80% would get vaccinated. And so again, more than what our report implies, we did a lot of research on what the vaccination rate should be during our analysis. Thank you. Could you turn to exhibit F next? Yes. Yes. And could you please go to page 114? Yes. Now, Mr. Carnegie asked you a few questions about, well, he asked you to read a sentence. Yes. From this. And as this was not something we had covered earlier, I was wondering if there was anything else you would like to say about that sentence and how it relates to the chart above? Yeah, I would say in general, I don't really like how that sentence was written. It is clear that across all scenarios, that is that that is not a true statement because directly above it, there is a scenario in which the healthcare costs, they do decline in 2020, but then they do not rebound in 2021. So I think that that's that sentence is not properly stated because there is a scenario. And again, if you utilize the model and put that information into the SOA model, you do get a lot of scenarios where whether it's called successful suppression, you can have the pent up demand be accounted for within 2020 and not go into 2021. Okay. Could we go back to page 110 in exhibit F, please? Okay. And again, you were asked questions, well, you were asked to read sentences from this page. And I was wondering if you had anything to add having read those sentences? No, I mean, I think that they are accurate, but it doesn't express any information about timing. So the utilization of services are likely to increase, and peak above normal levels, but that doesn't mean that that's necessarily going to happen in 2021 because it certainly doesn't say that. And it doesn't give any sort of timeframe around it. It could be much later than that. There are just, there's a lot of uncertainty about it. And yeah, picking a couple of sentences out of this entire report just really doesn't do the entire report justice. And lastly, if we could turn back to exhibit 10. Okay. Page eight. This is on the utilization trends. Yes. Mr. Hangoff was asking you some questions about the 0% from the 2019 filing, MVP's original filing in 2019, and this year's filing. And you looked at bullet point one, the first bullet point here on page eight. And I was wondering if you wanted to explain how you came to the conclusion that a 1% would be reasonable and appropriate. Right. Like I've already addressed, there were analyses that did produce, you know, a 0% as a potential utilization trend. However, given the enrollment increases that MVP is seen, it's not appropriate. Just like when I talked with Jess about the pharmacy trend, it's not appropriate to really take those things at face value. You have to really consider what's happening over the entire timeframe. And for utilization trend, especially as they have increased enrollment, they have started to show much higher utilization trends. In fact, from 2018 to 2019 as bullet point number three outlines, it's approximately 2.5%. So if we wanted to pick a particular assumption, we could have also possibly recommend 2.5 because it's in the realm of reasonable. But again, we were worried about credibility. It's a fast growing block. And so we preferred the analysis that was based on all four years of data and something that was in line with prior years. And we will continue to monitor this assumption because as we've seen across all of Vermont, there certainly is a positive utilization trend. But we do recognize that there are differences in the populations between the two carriers that could cause the gap that we're seeing, but certainly not to the point where there should be a no utilization trend assumption at this point. Thank you, Jackie. I have no further questions. Thank you. Thank you, Mr. Carnegie. Any additional cross on the redirect? Yeah, if I might, I just want to clarify because we want to move not beyond, but you asked more questions about a particular page of Exit F. Jackie, if you could go there, please. I'm sorry, Ms. Lee. No, that's fine. You can call me Jackie since I can call you Gary. You made reference to, I didn't ask you about it, but that table above with the three scenarios and the squiggly lines, do you see that? I do. And you said, I think your point was it's not across all scenarios, right? That if you look up there, the blue line goes back to the baseline in 2020, correct? Is that your point? That's my point, yes. But just to be clear, the red line, or maybe that's orange, hard to tell, and the green line, the red line doesn't get back to normal until September and the green line is not till November, is it? That's correct. And MVP's assumption is April, isn't it? It is April. Thank you very much. Thanks. No further questions. Mr. Hangoff, any further questions? No questions. Great. And I think we can move on to our last witness, Mike Fisher. Thank you, Jackie. Thank you. Take a minute and Mr. Fisher. AJ, I assume that you won't be asking Mr. Fisher questions. He'll just be providing testimony as in prior years. Yes, sir. Gary, I understand your issue with objections as in past years. Can we need to talk about that at all? I just would. I think Mr. Fisher's done a good job of being careful and if I had to interrupt, I'll do it respectfully, if that makes sense. And I haven't had to in prior years. And Mr. Fisher, could you please raise your right hand? Do you swear or affirm that the testimony you're going to give is the truth, the whole truth, and nothing but the truth? Yes. Okay. Thank you. Go ahead. Good afternoon. Thank you again for another riveting day. And I guess I really do want to take a moment to appreciate this process. It is painfully slow and it is difficult, but I think it's also very important. And I just think it's very important. And I also recognize that I often, as the healthcare advocate, am critical of the decisions made at tables like this. I'm critical often because of the outcome for Vermont families and for Vermont small businesses. I know that many board members share my critique. That insurance rates are already too high for a broad set of Vermonters and therefore that's not a train in my neighborhood in Lincoln. That any increase is unaffordable. And I fully recognize that the reasons for much of this have nothing to do with MVP or any insurer. It is all of the healthcare decisions put together. As I listened to the testimony this morning, I got the impression that MVP's perspective of the course of the coronavirus, this has been talked about just recently, it was quite positive that the virus had played out significantly. The statement that 2021 is predicted to be a normal year was said over and over again this morning. And wow, that felt great. I had a moment of hopefulness listening to that. But then during lunch, I did what I do too often. I went and checked the news and I went and checked the numbers and I went and checked some of the discussion about the challenges in front of us. And my optimism was crashed a little bit. I know that none of us can have confidence about how the spread of the coronavirus will be in 2021. Each of us or maybe more accurately, each of you have to evaluate your prediction because none of us can know about how reasonable it is that 2021 will be a normal or a pre-COVID year. I honestly hope I'm wrong. But I just feel the need to say that. There was an interesting juxtaposition between that discussion that the fear that led to so many people not getting care was something of the past. We had a brief distraction this morning and a light hearted chat about how the impact of the virus was affecting our own personal lives. And I thought that was an interesting juxtaposition. It forgave me for a slight distraction. It reminded me of this incredible disconnect that we're in right now taking place about whether schools should go back to in-person instruction. In community, after community, decision makers are meeting remotely to decide whether schools should meet in person. I'm married to a school employee. So from the advocacy perspective, the fear that led to so many people avoiding care in the last few months is alive and well. And that if we continue to have a very low incidence of the disease here in Vermont, my prediction is that that fear will abate. But if the virus comes back with any increased numbers, that fear will again result in reduced non-COVID claims. Let's skip that part. So I thank you to the more than 800 Vermonters who commented so far to you. I look forward to sitting with the board tonight to hear more comments. Those comments don't come with any analysis of industry standards or how MVP or the other insurer compares to other insurers. They don't base their perspectives having talked to actuaries or having any concept of actuarial standards. They come with an expertise in their own lives and expertise in their own budgets and expertise in how the coronavirus is impacting them. Long and short, Vermonters can't afford an increase. Vermonters need a break, particularly while they're under such overwhelming pressures. There is a great deal of unpredictability every year, but this year especially. MVP says because there is such unpredictability that they should get a rate increase and that they should be able to put more money in their reserves. As the advocate, I have to say because there's such unpredictability about the virus and because there's a great deal of very predictable sacrifice on the part of Vermonters that I have to call for Vermonters to get a break from any rate increase this year. Thank you. Thank you, Mr. Fisher. I think there's no more witnesses today, so we'll move on to closing statements. Does anyone need a couple minutes before we do that or is everyone ready to go? Gary, you'll be first. I'm ready. Okay, go ahead. I'll try to be brief. First of all, I want to thank the board for their time and attention today. I would note that it's 307. It's not 807 at night, so I hope we get points for that. All of us. The 6.06 proposed rate increase by MVP is supported by the evidence, and I want to make four points about that. First, and this relates to vaccinations, so this is a 0.3% issue, a 0.3% issue. I think the evidence has shown that the notion that the people of Vermont are going to get vaccinations for this pandemic, which is killing people, that only 55% of Vermonters will get the vaccine because it's like flu shots we get each year. That defies the evidence, and it defies common sense. 80% will. Look at the measles. Look at the mumps, which are greater than 90%. So that's the first point. Second, I've got two points on the pent-up demand issue. The pent-up demand issue is a 0.3% issue. If you look at Exhibit F, which you just heard Ms. Lee testify to, that apparently Elleny relied on to use that model in their modeling and in their conclusions on pent-up demand. If you go to page 114 of that Exhibit F, and you look at this graph that we were just talking about a moment ago, you've got three scenarios. One is you get back to the baseline at the end of 2020 in November, but the other two scenarios say we don't get back to the baseline until September or November. This is something that they relied on. This isn't something that Matt Lombardo relied on. The point is MVP has a reasonable position in saying end of April will be back to the baseline at the end of April. That's a reasonable position. It's in the middle. The second point on pent-up demand is this notion that doctors and hospitals would make a medical care decision on the timing of treatment for their patients based on whether they're receiving government assistance or not is simply not credible. MVP's estimate of a catch-up period at the end of this year and the beginning of next year is credible, it's reasonable, and it's based on credible evidence. Fourth point, any decision on a final rate by the board should of course take into consideration the interrelationship of the statutory criteria to ensure that a reduction on any one criterion doesn't result in the rates being inadequate. Thank you very much for your time today. Thank you, Mr. Connerty. I just realized that I did not give the board an opportunity to ask questions of Mr. Fisher. I think in my mind I was remembering to yesterday and that there were no to one question. I just feel the need to check. Does any board member have any questions for Mr. Fisher? I don't have a question, but I would make the same briefing request, which I think quite frankly you guys can the legal team can do. Absolutely. Thank you, Robin. We would be happy to respond to that question. I don't know what you're talking about. Yeah, so let me explain. I think in connection with Mr. Fisher's suggestion that the board should approve no rate increase, Robin's request was that in the briefing CHCA explain how that complied with ACA requirements in the board's standard of review. Essentially, is that correct, Robin? Yes. Thank you. Thank you. I apologize for that oversight. Mr. Angoff, proceed. The board said it better than I can or better than I have in a much less long winded way than I have. Member Holm said the quick key question is who can better bear the loss? The chair said aren't there assumptions that are just as likely as the assumptions that MVP made? In answer to the question, who can better bear the loss? Obviously, we're not asking when we're asking for a 0% rate increase. We're not asking for nothing. We think there are assumptions that are just as likely and we will show in our post-hearing brief what those assumptions are that easily produce a 0% rate increase. We think there are other assumptions that can produce a decrease. The assumptions that they make are always in their favor. The assumption about when a vaccine is going to be available. Sure, we all hope one will be available in 2021, but we don't know that, but based on that hope, they are charging their policy orders. They're assuming that providers will be at 110% of capacity beginning in August of this year through April of next year. 110% of capacity is a lot, particularly in August. I think that assumption is just as painfully unreasonable, but they've included it in their rate fund. They say 2021 will be like 2019. Maybe it will, maybe it won't, but we don't know. And at this time, we don't have the luxury of adopting assumptions that are going to raise the rate when there are other reasonable assumptions that will reduce the rate. Compared to the way they treat, they adopt assumptions that are highly doubtful, that benefit them. They disregard not just assumptions, but facts that benefit the policy holder. I was floored when Mr. Lombardo said we're not including the 1.7 million bucks that we get because the Supreme Court ruled for the industry in the risk card or litigation. The 1.7 million dollars is not all the money in the world, but the difference in how quick they are to adopt assumptions that raise the rate for the public and how adopting assumptions and in some cases fact that reduce the rate for the public to me is striking. Notably, both Mr. Lombardo and Ms. Lee acknowledged that there are lots of other scenarios that could take place. One final consideration, MVP is no longer just a small part of the market. MVP is almost half the market. So what the board does with this filing is very, very significant, much more than it's been in any past year. I think also the significance of a 0.0 percent increase is very important. I plead with the board not to cut the not to cut the rate increase to 3.5 or 2.8 or 1.7, but to 0.0. I think it's very important to send a message to the carriers, send a message to actuaries, and send obviously most important a message to all Vermonters that rates, there is no natural law that rates must increase every year. The question, who can better bear the loss? That is a question that is irrelevant to actuaries. Ms. Lee, so testified, everybody knows that. Who can better bear the loss is irrelevant to actuaries. It is not irrelevant to the board. So I had asked the board to disapprove MVP's proposal, disapprove L&E's recommendation, and adopt a 0.0 percent increase for this year's rate. Thank you very much for your patience. I appreciate it. Thank you. So there's a couple procedural matters I want to talk about before we wrap up the hearing and move to public comment. See Gary stepped away from his desk for a minute, so we'll just give him a minute. I just grabbed my calendar in case we're doing any dates, discussions. I really just wanted to give you both notice that while the hearing was going on, DFR issued two bulletins, bulletin 214 and 215. 214 is the final version of the draft policy or bulletin, I guess, final version of the draft bulletin that's in the binder. Bulletin 215 is about resumption of provider audit activities. I am giving you notice now that I plan to take judicial notice, administrative notice of these bulletins, and you have until the end of the week to let me know if you have any objections to that. I think there are appropriate subjects for judicial notice. May I just speak briefly on that point? It might help to cut to the chase, and I believe Jay may be in agreement on it, which is we have a record in this proceeding, we have exhibits in this proceeding, and it seems to me that for purposes of briefing we could reference these bulletins, but I don't see how they're part of this record, and if they're put in the end of the evidentiary hearing, I just don't see how that works. I see we could brief them as they're effectively a form of law that we could cite to, as opposed to taking judicial notice as exhibits in this proceeding. If you agree that they are essentially law, then I guess they're not adjudicative facts, they're legislative facts, and we can just proceed that way. I think that would be the better approach, unless Jay disagrees or smarter than I am on this. I don't have a strong feeling. Okay, so I mean, yes, they are essentially law, so the parties can cite them in their briefs, and the board can treat them as such. Is there anything else we need to talk about? That's the only thing I had before we wrap up and move to public comment. I did, if it's appropriate, if we could just talk scheduling for a moment, and that is, I believe hearing officer Barbara, you were preparing a list of follow-up questions for MVP. And in the past, and I may not have this quite right, we'll send an email in a day or two with the list, and then we're given some time to respond to it. I don't remember the exact dates. I remember it was kind of in five days or relatively quickly. So I just wanted to confirm that you'll be forwarding an email in contrast to us trying to figure out from our notes what we're supposed to do. That's correct. We will be reviewing our notes of the hearing, making sure we have things correct, and sending you a formal request for follow-up items. And then the last thing on my list was just asking Joanna when she would have the transcripts done. I would hope by the end of the week, yesterday's transcript is obviously going to take longer, because that was exceptionally long. So I know Sunny will be working on it, but I can't give you a timeline for her, but you can have mine, certainly. I believe by Friday. Thank you very much. That's all I had. Thank you. Okay. So are there members of the public who are present who would like to make a comment regarding this filing? I don't hear anybody. If there is anyone on the line, again, we're having a separate meeting from 4.30 to 6.30, specifically for public comments. The information regarding that meeting is on our website, so that's another opportunity for people to comment. So, again, if there's no comment from the public, then I think we can I'll turn it back over to you, Mr. Chair, to adjourn the meeting. Thank you, Mike. Thanks for two great days of serving as a hearing officer. These meetings went very orderly. Yesterday was a little long, and we're very grateful for today. Fortunately, Gary did take off his jacket, so it probably sped things up. With that, is there a motion to adjourn? Is there a second? All those in favor signify by saying aye. Aye. Aye. Any opposed? So I'll see everybody back here at 4.30. Thank you. You will. Bye-bye.