SAU 16 Medical Benefits Presentation October, 2010.

SAU 16 Medical Benefits Presentation

October, 2010

30 Linden Street • Exeter, NH 03833-2622

tel: 603.775.8400 fax: 603.775.8673

www.sau16.org


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

SAU 16 Joint Board Committee

• Formed in April 2010 to review all aspects of compensation.

• Focused on Health Care due to rapidly rising costs.

• Members:P. Lovejoy, Coop C. Gargaly, Brentwood

C. Ellis, Stratham P. O’Day, Exeter

A. Mower, Kensington C. Bellisio, Newfields

P. Flynn, SAU 16 M. Morgan, SAU16

B. Nigrello, E. Kingston, Chair

2


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

• Health Care cost have risen on average 11.9% per year over the past 13 years.

• At this rate a family plan will be over $44,000 annually within 5 years.

• In 2010 the increase was 17.1%. • Committee sought to analyze the data for

health care options.• Determined the best path was to engage a

Health Care Consultant.

3



tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

• Interviewed 3 highly recommended Health Care Consulting firms.

• Agreed to retain the services of IPG.• IPG was committed to representing all

stakeholders.• Extensive history with NH SAU’s.• Recently consulted with Concord School District.

• Successful in facilitating enhanced programs, additional provider options with greater discounts.

• Reducing overall costs to Concord School District.

4



tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

5

IPG Represents

SAU 16:

• Labor

• School Board

It is the intent of IPG to educate all parties as to the various plan designs and carriers available to SAU 16 when considering medical insurance.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

Mission Of Consultants

IPG has been charged with analyzing the claims

utilization and plan designs for all of the

participating districts within SAU 16. Our objective

is to provide guidance on best practices to contain

medical costs in the future while providing

comprehensive medical benefits to employees.

Lower claims = lower premiums = lower

contributions for everyone.6


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

7

There are Many Options

• LGC HealthTrust

• Primex

• SchoolCare

• Harvard Pilgrim

• HMO, POS, PPO, Indemnity

• Plan designs with multiple states In-Network


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

8

Health Insurance Carrier Options

LGC HealthTrust

SchoolCare Primex

Medical Carrier Partnership

Anthem CIGNA Harvard Pilgrim

Members 78,000All lines 56,917

All Groups Medical Only

15,109All Groups

Medical Only

9,944All lines of coverage

Revenue $367 MillionAll lines

$341 Million All groups

Medical Only

$95 MillionAll Groups

Medical Only

$87 MillionAll lines ofcoverage

$17.3 Million (SAU’s)

Medical Benefits for SAU’s

56 (2010) 27 (2009) 30 (2010)

8 (2010)

Source: LGC: M. Briggs email 9/22/10 and 9/24/10 SchoolCare: L. Duquette email 9-28-10. Primex: K. VanBuskirk email 9/9/10.

In NH there are three entities that offer health insurance to local governments and school districts.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

9

Carrier Financial HealthLGC HealthTrust:

Overall Net operating loss for 2009: (- $14.2 Million)Medical Book of Business loss for 2009: (- $14.8 Million)

SchoolCare: Net operating gain for 2009: + $4.12 Million

Primex: Net operating Loss for 2009 (-$2.9 Million) for Primex Health Programs

LGC and Primex report financials as a calendar year, above 1/1/09-12/31/09. SchoolCare reports as a fiscal year, above 7/1/09-6/30/10.

Source: LGC 12/31/09 Financial Statement and 9-24-10 email from M. Briggs for Medical Loss. NH SchoolCare Coalition Financial Statement ending 6/30/10. K. VanBuskirk email from Primex 9/9/10 breaking out financials for health portion of the business.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

10

Carrier AVERAGE Increases Compared to SAU 16

All LGC HealthTrust

SAU 16 LCG HealthTrust

SchoolCare Primex

2008-2009 3.8% 7% 2.5% 10.97%

2009-2010 3.3% 8.3% 5.8% 7.9%

2010-2011 16.8% 17.1% 2.2% 14.9%

Source: LGC 2/16/10 Memo from M. Briggs comparing CSD to LGC Overall. 2010-2011 LGC rate from 9-24-10 email from M. Briggs. SchoolCare 2/17/10 Overview Slide Presentation to CSD. Primex: K. VanBuskirk email 9/9/10. Paul Flynn Memo to SAU Joint Chairs, undated. SAU 16 Stewardship report for 17.1% rate, 6/7/2010.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

11

Relative Plan Design Claims Discounts

• Indemnity plans do not have traditional managed care negotiated discounts with medical providers. These plans have the highest claims costs in the medical industry. They have national provider access and freedom of choice. The JW and Comp Series fall into this category.

• PPO / Open Access + plans have negotiated claim discounts with national access to providers and freedom of choice. The claims cost of this type plan is less expensive than indemnity plans.

• POS plans have a deeper discount than the PPO plans with either PCP referral or freedom of provider choice depending on the carrier.

• HMO plans have the least claims costs.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

12

Product Mix Overview

LGC HealthTrust

SchoolCare Primex SAU 16

Indemnity 10% 14%

PPO 3% (Open Access+)

4%

POS 48% 21% 13% 70%

HMO 42% 76% 83% 16%

Source: LGC Financial Statements ending 12/31/09, page 24. SchoolCare email from L. Duquette 9/3/10. Primex email from K. VanBuskirk 9/9/10.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

13

Product Mix Comparison

One Of NH’s Largest SAUs

SAU of 1200 Employees

Product Mix %

Indemnity 1.8%

POS 19.1%

HMO 79.1%

This SAU has very low premiums, low claims, and has done an excellent job of educating employees as to the value of the HMO plan. 79% of employees are on the HMO compared to only 42% in the LGC Trust book of business and 16% for SAU 16.

SAU 16 Product Mix %

Indemnity 14%

POS 70%

HMO 16%

Source: SAU 16 census from LGC Health Trust 6/8/10. Anthem Cost & Utilization for another NH SAU, reported 10-2010.

SAU 16


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

Education on Benefit Design Differences

It is important for each employee of SAU 16 to know the differences in their out of pocket potential costs with Indemnity, POS and HMO coverage.

14


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

15

A Teachable Moment

BENEFITS JW Indemnity Plan COMP 100 AND 200 Matthew Thornton Blue HMO Plan

Blue Choice 3-Tier POS Plan

When Your PCP provides or arranges your care

Option 1 - When your PCP

provides or arranges your

care

Option 2 - When you seek care directly from a

Blue Choice provider

Option 3 - When you seek care

from any out-of-network provider

CALENDAR-YEAR DEDUCTIBLE

$100 per person/$200 per family

COMP 100: $100/$200 COMP 200: $200/$400

None

OR $500 per person

None None $150/$450

CALENDAR-YEAR OUT-OF-POCKET MAXIMUM

$500 per person/$1,400 per family

COMP 100: $500/$1,000 COMP 200: $600/$1,200

None

OR $1500 per family

None $600/$1,800 $1,050/$3,150

PREVENTIVE CARE, and OFFICE VISITS

You pay for first two visits per person per

calendar year. Next 10 visits per person per

calendar year covered 100%. All other visits

covered 80% after deductible.

Preventive Care covered at 100% if network

providers are used. Regular office visits 80% after deductible to Max

Out-of-Pocket.

100% after $5 copy

OR 100% after $15 copay

100% after $5, or $10, or $20 copay

100% after $15, or $30, or $50 copay

80% after deductible

100 $5 Office Visit Copays =

COMP 100 or JW Plan Designs with $500 Max Out of Pocket


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

16

HMOs Result in Lower Overall Claims Costs

Lower Overall Claims Costs Result in Lower Premium Increases and Employee Contribution Levels for SAU 16.

POS 3 Tier $436.89 pmpm, 1149 members

HMO $262.88 pmpm, 193 members

POS 3 Tier,

$436.89

HMO, $262.88

$0.00$50.00

$100.00$150.00$200.00$250.00$300.00$350.00$400.00$450.00

Claims Cost PMPM

Source: Anthem SAU 16 Cost & Utilization report 9/292010 page 2.A.4. Claims Costs Per Member Per Month 7/2009-6/2010.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

17

JW & Comp Indemnity Plans• Everyone is impacted by the cost of the JW and

Comp Plans.

• Employees – more premium for less benefits than POS or HMO. You pay more out of pocket.

• SAU 16 - high claims cost with very little discounting. The same surgery could cost as much as 30% more when billed through a Comp or JW plan than when billed through an HMO or POS plan.

Example: Inpatient Procedure: Same Hospital, Same Physician

HMO/POS: $14,000

Comp or JW: $18,200A $4,200 Difference!


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

18

Exeter Hospital

Effective 12/31/10, Anthem will terminate its contract with Exeter Hospital and Exeter physician medical staff. Unless a new agreement is reached, Exeter Hospital will no longer be participating in the Anthem network as of 1/1/2011.

47% of All SAU 16 inpatient and outpatient claims are through Exeter Hospital.

Source: Glenn Klink, VP Exeter Health Resources 9/8/10 Memo from Exeter Hospital.

SAU 16 Anthem Claims & Utilization Report 9/29/10.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

Exeter Hospital

Exeter Hospital and Anthem Blue Cross Blue Shield are currently at an impasse with their provider negotiations. Exeter Hospital and physician affiliated group have recently sent correspondence to their patients concerning the situation at hand.

Anthem Blue Cross Blue Shield has published a public website http://group.anthem.com/exeter to access information on updates and a broad range of topics pertaining to Exeter Hospital.

19


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

20

SchoolCareThree (3) Plan Options

Open Access + 100 (comparable to JW with LGC HealthTrust)

• Access to CIGNA’s National Network (50 states).

• Open Access Plans allow members to self-refer.

POS (comparable to Blue Choice with LGC HealthTrust)

•Access to CIGNA New England Seamless Network (NH, ME, VT, MA and RI) No PCP referral necessary on any tier; members may self-refer.

HMO (comparable to Matthew Thornton Plan with LGC HealthTrust)Access to CIGNA New England Seamless Network (NH, ME, VT, MA and RI). PCP referral required. Boston hospitals In-Network.

• HMO Guesting Privileges – Can enter a local HMO network anywhere in country that CIGNA has providers.

• All Plans available to retirees anywhere in the country.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

21

Recommendations

Side Bar Language to Allow Shopping of Coverage

It is the recommendation of IPG that SAU 16 seek side bar language, where necessary, with each of the Labor Units. The side bar language would give SAU 16 the right to look at competitive pricing from SchoolCare and Primex. If it is determined that a given Labor Unit wishes to switch carriers or plan designs within the LGC HealthTrust, then such a change would be pursued in accordance with the terms or sidebar of the applicable Collective Bargaining Agreement.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

22

SAU 16 Proposed Sidebar Language

"For the plan year beginning 7/1/11 (Fill in name of district) may seek bids from alternative health insurance providers, or alternative plans within the LGC HealthTrust may be adopted in accordance with the terms of the Collective Bargaining Agreement of (Fill in the name of district). Sufficient time and resources shall be provided by (Fill in name of district) Labor and School Board to fully research and review the alternative plans with its members before implementing any identified changes. Should a decision be made to elect an alternative health insurance provider and plans, or alternative plans within the LGC HealthTrust, this decision will render the current contractual obligation to Anthem Blue Cross Blue Shield null and void for the period July 1, 2011 – June 30, 2013.”


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

23

Proposed Timeline

October 2010: IPG to meet with Representatives from Labor, Administration & School Board.

November 10, 2010: Goal is to secure contract language sidebar approval.

November 16, 2010: IPG to issue full RFP to shop Medical coverage.

January 2011: Carrier quotes back. IPG to analyze/spreadsheet.

Before February Vacation 2011: IPG to meet with School Board, Labor, & interested parties regarding proposed plan design or carrier changes.

By March 11, 2011: Approve plan design or carrier changes, if any.

April/May 2011: Open Enrollment. IPG to present to employees either to maximize current LGC HealthTrust offerings – including Flex and Wellness -or to explain new plan/carrier offerings.


tel: 603.775.8400 fax: 603.775.8673

www.sau16.org

24

THANK YOU!

QUESTIONS?

SAU 16 Medical Benefits Presentation October, 2010.

Documents

Transcript of SAU 16 Medical Benefits Presentation October, 2010.