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ORANGE COUNTY 2010 MEDICAL PLAN CHANGES

ORANGE COUNTY 2010 MEDICAL PLAN CHANGES. PRESENTATION OUTLINE. BACKGROUND TOBACCO USE SURCHARGE MEDICAL PLAN CO-PAY CHANGES PHARMACY PLAN CHANGES SPOUSAL WELLNESS FOR LIFE SCREENINGS ACTION REQUESTED. PRESENTATION OUTLINE. BACKGROUND TOBACCO USE SURCHARGE MEDICAL PLAN CO-PAY CHANGES

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ORANGE COUNTY 2010 MEDICAL PLAN CHANGES

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  1. ORANGE COUNTY 2010 MEDICAL PLAN CHANGES

  2. PRESENTATION OUTLINE • BACKGROUND • TOBACCO USE SURCHARGE • MEDICAL PLAN CO-PAY CHANGES • PHARMACY PLAN CHANGES • SPOUSAL WELLNESS FOR LIFE SCREENINGS • ACTION REQUESTED

  3. PRESENTATION OUTLINE • BACKGROUND • TOBACCO USE SURCHARGE • MEDICAL PLAN CO-PAY CHANGES • PHARMACY PLAN CHANGES • SPOUSAL WELLNESS FOR LIFE SCREENINGS • ACTION REQUESTED

  4. BACKGROUND • 2007 • County moved to self-funded medical • 2009 • Approved new contract with UHC as ASO provider • Contracted with Express Scripts as PBM

  5. BACKGROUND • Move to Self-funded working well • Provides the County: • More detailed claims experience information • Increased flexibility in plan design

  6. BACKGROUND • Plan Trend (Experience) Remains a Challenge • Plan Costs Increase 8–10% Each Year • Continued Increases Are Not Sustainable

  7. BACKGROUND • County Able to Absorb Costs in 2010 with No Premium Increase • Plan Changes Needed To: • Help Offset Cost Increases in Specific Areas • Influence Member Lifestyle Choices and Plan Utilization

  8. PRESENTATION OUTLINE • BACKGROUND • TOBACCO USE SURCHARGE • MEDICAL PLAN CO-PAY CHANGES • PHARMACY PLAN CHANGES • SPOUSAL WELLNESS FOR LIFE SCREENINGS • ACTION REQUESTED

  9. TOBACCO USE SURCHARGE • Tobacco Use Is a Leading Cause of Death and Key Driver of Medical Costs • 2008 WFL Screenings Tied to Medical Claims • Results Show Medical Claims Higher for Smokers • $5,412 – Current or Previous Smokers • $3,567 – Never Smoked

  10. TOBACCO USE SURCHARGE • Medical Plan Oversight Committee (MPOC) Recommends Implementing $25 Per Pay Period Tobacco Use Surcharge in 2010.

  11. PRESENTATION OUTLINE • BACKGROUND • TOBACCO USE SURCHARGE • MEDICAL PLAN CO-PAY CHANGES • PHARMACY PLAN CHANGES • SPOUSAL WELLNESS FOR LIFE SCREENINGS • ACTION REQUESTED

  12. MEDICAL PLAN C0-PAY CHANGES • MPOC Met with UHC, HR Benefits & RobinsonBush • Reviewed 2008 & 1st Quarter 2009 Plan Experience • Identified Key Cost Drivers and Solution Opportunities

  13. MEDICAL PLAN C0-PAY CHANGES Outpatient Surgery • Hospital Outpatient Surgery Costs Increased 17.7% • Average Cost $3,700 - Versus $723 for Surgery Performed in Ambulatory Surgery Center • Average Cost of Colonoscopy $1,853 – Versus $513

  14. MEDICAL PLAN C0-PAY CHANGES Inpatient Hospital • Inpatient Admissions Decreased by 5% • Average Cost per Admission increased 11% - From $10,708 in 2007 to $11,867 in 2008 • Need to Better Align Inpatient & Outpatient Co-Pays

  15. MEDICAL PLAN C0-PAY CHANGES MPOC Recommends: • Increasing Co-Pay for Non-Preventive Outpatient Surgery and Preventive Colonoscopy Performed in a Hospital to $200 • Moving Inpatient Hospital Co-Pay to $300 for 1st Day and $100 for Next Three Days to Maximum $600 Per Admission

  16. PRESENTATION OUTLINE • BACKGROUND • TOBACCO USE SURCHARGE • MEDICAL PLAN CO-PAY CHANGES • PHARMACY PLAN CHANGES • SPOUSAL WELLNESS FOR LIFE SCREENINGS • ACTION REQUESTED

  17. PHARMACY PLAN CHANGES • Outsourced Pharmacy to Express Scripts in 2009 • Few Changes Made in First Year • New Programs Recommended to Control Rx Costs

  18. PHARMACY PLAN CHANGES • Select Home Delivery & Call 4 Generics • Voluntary Programs • Projected Savings - $402,000 to County & $251,000 to members • Step Therapy Program • Grandfather Provision • Projected County Savings - $539,000

  19. PHARMACY PLAN CHANGES MPOC Recommends: • Adding Select Home Delivery, Call 4 Generics and Step Therapy Programs to Pharmacy Plan

  20. PRESENTATION OUTLINE • BACKGROUND • TOBACCO USE SURCHARGE • MEDICAL PLAN CO-PAY CHANGES • PHARMACY PLAN CHANGES • SPOUSAL WELLNESS FOR LIFESCREENINGS • ACTION REQUESTED

  21. SPOUSAL WELLNESS FOR LIFE SCREENINGS • 2008 Spousal Claims Averaged 27.5% Higher Than Employee Claims • Spouses Not Included in Health & Wellness Programs • WFL Screenings Offered to Employees Only • Need to Engage & Encourage All Plan Members to Make Wise Healthcare Decisions

  22. SPOUSAL WELLNESS FOR LIFE SCREENINGS MPOC Recommends: • Extending Voluntary Annual Wellness for Life Screenings & HRAs to Spouses Covered Under the County’s Medical Plan

  23. PRESENTATION OUTLINE • BACKGROUND • TOBACCO USE SURCHARGE • MEDICAL PLAN CO-PAY CHANGES • PHARMACY PLAN CHANGES • SPOUSAL WELLNESS FOR LIFE SCREENINGS • ACTION REQUESTED

  24. ACTION REQUESTED Approve the Following MPOC Recommended Changes to the County’s 2010 Medical & Pharmacy Plans: • $25 Per Pay Period Tobacco Use Surcharge • $200 Co-Pay for Non-Preventive Outpatient Surgery and Preventive Colonoscopy Performed in Hospital Surgery Center

  25. ACTION REQUESTED • Inpatient Hospital Co-Pay of $300 for 1st Day and $100 for Next Three Days to Maximum $600 Per Admission • Adding Select Home Delivery, Call 4 Generics and A Step Therapy Program to Pharmacy Plan • Extending Voluntary Annual Wellness for Life Screenings & HRAs to Spouses Covered Under the County’s Medical Plan

  26. ORANGE COUNTY 2010 MEDICAL PLAN CHANGES

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