The subsidized cost for Basic Health is projected to decrease 37.4% in calendar year 2010 from 2009, compared with 2009's increase of 4.2% over 2008. This projected cost is slightly above the budgeted level of -42% and is based on projected cost for 2010 and a combination of actual cost through August 2009 and projected for the remainder of 2009.
This projection is based on contract health plan rates for 2010 applied to projected enrollee volume and risk mix (primarily age and income) based on historical trend data.
The reduction in the rate of increase between 2009 and 2010 is due primarily to reduced enrollment, benefit redesign including increased enrollee cost-sharing and negotiated contract plan rates.