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New York, November 4, 1997

The Insurance Department today announced that the Department has cut by almost half, a 52.6% rate increase requested by MVP Health Plan. The HMO has been granted a 28.7% overall average rate increase on its individual standardized contracts. The rate change is effective November 1, 1997 and affects 3,700 of MVP's members.

This decision by the Insurance Department comes after a careful examination of MVP's current financial condition and its projections of revenue and expenses for next year. Testimony submitted at a public hearing September 12 in Albany was also considered.

MVP stated that a rate increase was necessary on these contracts because of higher than anticipated cost and utilization for inpatient hospitalization, physician visits and prescription drugs. However, the Department disagreed with how MVP combined the costs of both its standard individual contracts and its point of service contracts to calculate the premium rates for the standard contracts. The Department also rejected MVP's loss projections and instead used 15-month actual loss data to project MVP's losses for the rest of the coming year. As a result, the Department approved an average increase of 28.7%.

The Department also approved MVP's request to change from a two tier rating structure (individual or family) to a four tier rating structure (individual, husband/wife, parent/children, or family).

The HMO has members in Albany, Broome, Chenango, Clinton, Columbia, Delaware, Dutchess, Essex, Franklin, Fulton, Greene, Hamilton, Herkimer, Lewis, Madison, Montgomery, Oneida, Onondaga, Orange, Otsego, Putnam, Rensselaer, Saratoga, Schenectady, Schoharie, St. Lawrence, Tioga, Ulster, Warren and Washington counties.

A table listing individual contract rate changes is available upon request.

Department of Financial Services


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