Transcript Trends and Issues in Health Care presented by

Trends and Issues in Health Care
presented by
Dan Kosmicki,
Tom Hamernik,
Daryl Obermeyer
Summarize the ongoing decisions of
the Educators Health Alliance on
matters that could have a future
impact on EHA member
participants.
Share potential changes in
healthcare options.
Topics to cover
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Nebraska History on Teacher Health Insurance
Current National Trends
Issues impacting 2009/2010 EHA pricing
EHA recent trends and results
Possible EHA changes
School
Year
Monthly
Single
Premium
Monthly
Family
Premium
Monthly
Dental
Premium
% Change in
Family
Premium
67-68
$9
$21
68-69
$9
$26
24%
69-70
$9
$26
0%
70-71
$10
$29
12%
71-72
$11
$32
10%
72-73
$11
$32
0%
73-74
$11
$32
0%
74-75
$12
$35
9%
75-76
$19
$50
43%
76-77
$23
$62
24%
77-78
$26
$69
11%
78-79
$31
$83
20%
79-80
$31
$83
0%
80-81
$31
$83
0%
School
Year
Monthly
Single
Premium
Monthly
Family
Premium
Monthly
Dental
Premium
% Change in
Family
Premium
81-82
82-83
$41
$51
$111
$137
34%
23%
83-84
$62
$169
23%
84-85
$67
$180
7%
85-86
$67
$180
0%
86-87
$67
$180
0%
87-88
$70
$191
6%
88-89
$82
$223
17%
89-90
$106
$290
30%
90-91
$130
$356
23%
91-92
$147
$402included
13%
92-93
$160
$438included
9%
93-94
94-95
$163
$172
$444included
$471included
1%
6%
95-96
$179
$490included
4%
School
Year
Monthly
Single
Premium
Monthly
Family
Premium
Monthly
Dental
Premium
% Change in
Family
Premium
96-97
$165
$449
included
-8%$0 ded.
97-98
$169
$462
included
3%$0 ded.
98-99
$186
$509
included
10%$0 ded.
99-00
$200
$541
included
6%$0 ded.
00-01
$217
$588
included
9%$0 ded.
01-02
$233
$632
included
8%$100 ded
02-03
$263
$710
$17
12%$250 ded.
03-04
$271
$764
$17
8%$250 ded.
04-05
$301
$850
$16
11%$250 ded.
05-06
$330
$931
$16
10%$250 ded.
06-07
$361
$1,018
$16
9%$300 ded.
07-08
$390
$1,100
$17
8%$300 ded.
08-09
$448
$1,209
$20
10%$300 ded.
Educators Health Alliance (EHA) board consists
of 12 voting members compromised of:
 3 NASB appointments
 3 NCSA appointments,
 6 NSEA appointments
NASB has been a part of since 2001
NCSA has been a part of since 2000
Independent actuarial consultant
– Kevin Dolsky
National Healthcare
Trends in 2009
• Cost-shifting arising from the growing large
number of uninsureds,
• Costs associated with maintaining the current
offering of Medicare and Medicaid services
continue to increase and will account for
nearly one in every four dollars spent by
private payers in 2009. This trend is
expected to continue in part because the
federal government is underfunding public
medical insurance programs and the number
of uninsured's is increasing.
• Wellness programs and initiatives to personalize
the experiences of health plan members are on
the rise.
• Employers will rely on prevention and disease
management programs to temper costs in 2009
rather than shifting higher levels of cost-sharing
onto workers.
• The number of privately insured continues to
slowly decrease, which increases cost shifting,
making it more difficult to control costs and
increases competition among health plans as
they try to keep cost growth in check without
sacrificing member satisfaction.
• In 2009, the downward trend is expected to
level off, according to a new
PricewaterhouseCoopers Health Research
Institute (HRI) report, "Behind the Numbers:
Medical Cost Trends for 2009," which is based
on HRI analyses and a survey of more than
500 employers and provider-based health
plans. Actual Medical costs are expected to
grow 9.6 percent in 2009, compared with a
9.9 percent rate in 2008 and double-digit
annual increases in prior years.
Issues
impacting 2009/2010
EHA pricing
2009-2010 EHA Pricing
• Survived the new underwriting rules which went into effect
for 08-09:
o Surcharge groups with low participation
o 31 subgroups surcharged
o 150+ subgroups receive discount
• Survived implementation of the new 4 Tier pricing structure
which went into effect 08-09: ( comparison to single rate)
o Single (1.00)
o Single & child(ren) (1.85)
o Employee & Spouse (2.10)
o Employee, Spouse and Children (2.6965)
• Survived the open Enrollment period/opportunity for 08-09
2009-2010 EHA Pricing
• Impact of the Federal government’s new 2010
Medicare & Medicaid claim reimbursement rates
which will decrease the amount which doctors
and hospitals can collected on fees from the
federal programs, thus physicians and hospitals
must increase rates charged to the insurance
carriers and those self insured.
• Federal governments requires health insurance
carriers to utilize new medical billing coding
system, and have compliant computer systems.
2009-2010 EHA Pricing
• EHA experienced better than expected
financial results as of August 31, 2008.
• EHA’s Rate Stabilization Reserve (RSR) is
currently above expectations. Targeted range
is 10 – 20% of annual contributions.
• The RSR is available to help subsidize (or lower
the immediate effect) of any large medical
cost increase.
2009-2010 EHA Pricing
• Year 2 of the 3 year phase-in for the new
Family rate under the 4 Tier pricing structure.
Family rate ultimately expected to be at 2.82
of the single rate. Transition phrase-in is
funded by RSR.
• EHA added a $5,000 deductible plan option
which is also HSA eligible. Such plan option is
available on a subgroup-wide basis only.
Possible 2009-2010 EHA Pricing
• 1% increase associated with the removing of
the underwriting rule related to contribution.
• 2-3% increase associated with Medicare &
Medicaid cost reimbursement rate changes
• Typical 5% increase in member utilization
• Typical 4% increase in physician, hospital,
laboratory costs
Possible 2009-2010 EHA Pricing
• 07-08 trended 5% better than expected
• 08-09 will hopefully trend better than
expected
• RSR is above target level, thus funds available
to stabilize future premium cost pressures
EHA’s
Recent Trends
and
results
Some of EHA’s Key points from 07-08
• $527,000,000 – claims submitted
• $300,000,000 - premiums collected
• Claims - 81% paid by Plan & 19% paid by Insureds
(80/20 in prior four years)
• 75,000+ enrollees
• 35,000+ contracts
• 55% of enrollment have $300 deductible plan
• 39% of EHA enrollees are age 45 to 65
Some of EHA’s Key points
• 19% of claim payments associated with claims
over $100K (238 members)
• 12 members with claims over $500k
• Prescription drug trends increased under 5%
annually since 2005 ( more generics used)
• 8% trend increase in hospital and professional
service.
• Timely claim service responsiveness &
payment
EHA GROUPS BY DEDUCTIBLE
500
450
400
350
300
250
200
150
100
50
0
1998
2000
2002
2004
2006
2007
$0 Deductible
$100/150 Deductible
$250/300 Deductible
$500/550 Deductible
$1000/1050 Deductible
$5,000 HSA Eligible
2008
EHA 2007-08 USE OF FUNDS
To RSR
Admin/Tax 5%
7%
Claims less Rx
Rebates
88%
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EHA’s 2007-2008
Claim Cost Changes
Category
Cost per Service Number of Services
Cost per Member
Hospital Inpatient
7.3%
5.5%
13.2%
Hospital Outpatient
0.8%
1.6%
2.4%
Physician
3.8%
5.1%
9.0%
Drug
-4.2%
5.2%
0.8%
07-08 Drugs
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$42 million
890,000 prescriptions
$47 - Average prescription cost
12.7 - Average prescriptions per member
$604 - Average drug cost per member
$592 - Average drug cost per member to EHA
25% of drug costs from 14 drugs
64% in number of prescriptions were generic
23% of costs were generic
First quarter of 2007 - offered free generic drugs
TOTAL TREND
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
May-08
Mar-08
Jan-08
Nov-07
Sep-07
Jul-07
May-07
Mar-07
Jan-07
Nov-06
Sep-06
Jul-06
May-06
Mar-06
Jan-06
Nov-05
Sep-05
Jul-05
May-05
Mar-05
Jan-05
Nov-04
Sep-04
5-Month Average
12-Month Average
Possible EHA Changes
• EHA plan have its own field representative
(Plan Advocate) to answer marketing types of
questions
• New look to EHA web site
• High deductible /Healthcare Savings Accounts
• Disease Management program (currently
Cardiac and diabetic focus)
• Wellness plans (revisit opportunities)
Thanks to the following for
contributing information to this
presentation
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Blue Cross Blue Shield of Nebraska
Actuarial & Health Care Solutions, LLC
Nebraska Association of School Boards
Nebraska State Education Association
Fellow EHA Board members