Demystifying health insurance premiums

Rising health care costs can be frustrating and create financial difficulties.

Increases in cost and demand for care are causing higher premiums and higher out-of-pocket costs nationwide. Expensive prescription drugs, increases in outpatient procedures, and high-cost hospital care are challenging patients, doctors, businesses, health plans, and the entire health care system.

At Univera Healthcare, it’s our mission to help our members live healthier and more secure lives through access to high-quality health care that’s as affordable as possible. That mission guides everything we do and every decision we make. We want to help you better understand how health insurance premiums are calculated, and what we are doing to ensure rising costs don’t get in the way of better health and access to care.

Calculating premiums

Utilization, cost, intensity, and administration* are four things a health plan must consider when calculating health care premiums:

• Utilization is the number of medical services and prescription drugs that people use. Increased utilization means more claims and costs for health plans.
• Cost reflects the fees that health insurers pay to hospitals, physicians, pharmacies, and other health care providers. Cost also includes the increasing prices of prescription drugs and durable medical equipment.
• Intensity is when a treatment or procedure is replaced by one that’s more expensive. New treatments and new drugs typically cost more.
• Administrative costs are the normal expenses needed to run a health insurance business, including the costs associated with processing claims, providing customer service, providing clinical staff to work with members and their providers on their care, enrollment and billing, and government taxes/fees.

* Main items considered for fully insured plans.

How are premium dollars spent?

Your health insurance costs largely reflect how much we pay for your care.

In 2024, Univera Healthcare spent 92 cents of every premium dollar collected to pay for services and care for its members – including doctor visits, hospital care and medicine. The rest was spent on taxes, fees, and administrative costs.

Caring for members and managing rising costs

We have created a variety of innovative programs that focus on the care of our members, as well as the management of rising costs.

• Getting the right prescription at the right time: Our pharmacy programs focus on prescription drug safety, including helping members take medications as prescribed, while also managing rising costs. Led by our expert pharmacists, these programs include Pharmacy Concierge, Specialty Drug Benefit Optimization and Site of Care.
• Stopping health problems before they start: Remember the saying “an apple a day keeps the doctor away?” Just like that saying, the best way to help members focus on their health and address affordability is to minimize the need for additional care. Our covered preventive care programs include routine checkups, screenings, and immunizations. We offer resources such as our online Pharmacy Price Check and Find a Doctor tools, care management resources, and free 24/7 nurse call line. Also, we have the Wellframe® app, which gives instant access to a dedicated care manager, dietitians, nurses, and other health care professionals.
• Helping those with chronic or complex conditions: Through a care management team, we ensure all members, but especially those with chronic or complex conditions, or those managing multiple health concerns at once, are supported through customized outreach, education, and assistance with interpreting their benefit package and claims history to identify potential solutions or ways to improve care while managing costs.
• The doctor is in (our team): Our medical director team is made up of physicians who are board-certified in their respective fields. Each physician has many years of clinical experience in Western New York and is proud to live and work in the community that they serve. We are committed to working in partnership with you and your providers to deliver high-quality, evidence-based, and cost-effective health care.

To learn more about these and the many other programs offered through Univera Healthcare, contact us by calling the number on the back of your member card or visit us online.