Champion Health Case Study
A Five-Year Actuarial Review of CHAMP Integration and Its Impact on Major Medical Claims
Executive Summary
$1,812
Average Annual Reduction
Per employee in major medical claims versus non-CHAMP groups
14.6%
Claim Cost Variance
To 17.3% reduction in overall claim costs
5 Years
Study Period
Comprehensive analysis from 2019–2024
This actuarial analysis evaluates the impact of integrating the Champion Health CHAMP Program alongside employer-sponsored major medical plans. CHAMP offloads non-catastrophic claims—primary care, urgent care, prescription, behavioral health, and preventive services—from major medical loss runs, resulting in improved renewal outcomes and reduced volatility.
The Challenge
Market Pressures
Medical inflation and utilization trend growth have consistently exerted upward pressure on employer-sponsored health plan renewals. Employers in the 25 to 500 life range face particular challenges.
  • Low credibility due to smaller group size
  • Disproportionate renewal impacts from claim frequency spikes
  • High volatility in year-over-year costs
The CHAMP Solution
The CHAMP program was designed to mitigate volatility by absorbing high-frequency, low-severity claims through a supplemental benefit model that diverts utilization from the carrier's loss experience.
This study quantifies the differential in per-employee annual claim costs and evaluates underwriting and renewal impact over five years.
Study Methodology
142 Employer Groups
67 with CHAMP integration; 75 without CHAMP as control groups
181 Average Group Size
Employees per employer group studied
5 Plan Years
Data spanning 2019–2024 for comprehensive analysis
Claim data were normalized to Per Member Per Month (PMPM) and trended at 4.8% annually to reflect medical inflation. Credibility adjustments were applied for groups under 200 employees using a 0.72 weighting factor. Each CHAMP group was matched with a non-CHAMP control of similar demographics, industry, and benefit structure.
A Bayesian credibility adjustment smoothed inter-year fluctuations. Claim frequency and severity were modeled using a compound Poisson-Gamma framework to separate random variation from trend suppression.
Aggregate Claim Differential
The data reveals significant cost advantages for employers who integrated CHAMP with their major medical plans across all key metrics.
13%
Reduction in claims frequency per 1,000 employees
4.5%
Decrease in average claims severity
16.9%
Lower normalized PMPM costs
Claim Type Suppression Analysis
CHAMP's coverage scope—preventive, urgent, primary, behavioral, and pharmacy—captures 60–70% of total claim frequency. By absorbing these costs, CHAMP reduces loss run exposure and stabilizes renewal performance.
Real-World Impact: Three Case Examples
1
Loss Ratio Transformation
Major Medical Loss Ratio dropped from 92.4% pre-CHAMP to 73.8% post-CHAMP. Renewal adjustment improved by 18.3 percentage points: -11.5% versus +6.8% trend in control group.
2
Urgent Care Utilization
Annual claims reduced by $1,912 per employee. Urgent care utilization dropped 26% year over year after CHAMP integration. Renewal trend decreased from 9.2% to 3.1%.
3
Volatility Stabilization
Historically volatile group stabilized within ±4% renewal variance. Improved stop-loss pooling efficiency observed. Predictable cost structure achieved.
Underwriting and Renewal Advantages
Measurable Improvements
CHAMP shifts low-severity claims out of the carrier's risk pool, lowering claim frequency and improving renewal predictability for employers under 300 lives.
8.4-Point Loss Ratio Improvement
The $1,812 per employee reduction translates directly to improved loss ratios
6–9% Renewal Advantage
Depending on plan structure, employers see significant renewal improvements
Enhanced Predictability
Reduced volatility creates more stable, forecastable healthcare costs
Actuarial Interpretation
The observed trend aligns with expected outcomes of claim-diversion programs targeting first-dollar utilization. The persistent $1,812 per employee annual reduction across five years provides strong actuarial credibility (p < 0.01).
1
Claim Diversion
CHAMP captures 60–70% of total claim frequency through comprehensive coverage
2
Loss Run Reduction
High-frequency, low-severity claims absorbed outside carrier's risk pool
3
Renewal Stabilization
Improved predictability and credibility in underwriting models
4
Sustained Performance
Consistent results maintained across five-year study period
Statistical significance achieved with p < 0.01 and R² = 0.83 correlation, demonstrating robust and reliable outcomes across diverse employer groups and market conditions.
Conclusion
Lower Claim Frequency
Consistent reduction in high-frequency, low-severity claims across all categories
Improved Loss Ratios
Measurable improvements in underwriting performance and carrier relationships
Favorable Renewals
6–9% renewal advantage versus non-CHAMP control groups
Employers integrating CHAMP with major medical plans consistently demonstrate lower claim frequency, improved loss ratios, and favorable renewals. CHAMP provides measurable improvements in predictability, credibility, and overall plan stability.
The five-year actuarial analysis confirms that CHAMP delivers sustained value through strategic claim diversion, resulting in an average annual reduction of $1,812 per employee and creating a more stable, predictable healthcare cost environment for mid-market employers.