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Public Employees Benefits Board

Public Employees Benefits Board. June 22, 2004 SeaTac Holiday Inn. 2005 Medical Procurement Overview and Results June 22, 2004. Richard Onizuka, Health Care Policy. Summary of 2005 Medical Procurement. Health Care Environment Purchasing Strategy Key Facts From PEBB Procurement

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Public Employees Benefits Board

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  1. Public Employees Benefits Board June 22, 2004 SeaTac Holiday Inn

  2. 2005 Medical Procurement Overview and ResultsJune 22, 2004 Richard Onizuka, Health Care Policy

  3. Summary of 2005 Medical Procurement • Health Care Environment • Purchasing Strategy • Key Facts From PEBB Procurement • Procurement Results

  4. Health Care Environment • Hewitt Associates and Aon Consulting forecast that managed care plans will ask for 2005 premium increases in the range of 12.5% - 14.4% • Marketplace moving towards: • Higher enrollee premiums & point of service costs • Choice of lower premium plan designs • New tools, information and plan designs to help employees be better health care consumers

  5. Health Care Environment • Trends in health care spending are moderating in all service categories • Prescription drugs typically showing the largest trend reduction • Utilization growth is slowing

  6. 2005 Purchasing Strategy Build long-term partnerships with carriers to help us realize PEBB’s vision of providing affordable, quality health care.

  7. 2005 Purchasing Strategy • Quality and Access integral to purchasing, but cost continued to be a purchasing priority • “Benchmark Rate” for Non-Medicare • Non-Medicare and Medicare bids actuarially reviewed and negotiated in comparison with the overall program

  8. Key Facts --PEBB Procurement • Unlike last year, financial statements to the OIC reflect all Bidders made a profit on PEBB business in 2003 • Insufficient data for 2004 conclusions • Similar to the national health care market environment, PEBB trends and utilization appear to be moderating

  9. Procurement Results • Bids from all 6 current carriers • Regence bid under Regence BlueShield license, rather than current RegenceCare license • All carriers were notified of preliminary contract awards for 2005 • No service area reductions and one carrier expanded into a partial county

  10. PEBB 2005 MCO Service AreasWHITE = FULL MCO COVERAGERED = NO MCO COVERAGEPURPLE = PARTIAL MCO COVERAGE Pend Oreille CHP, GHC/ OPT (Partial) Whatcom CHP, GHC, OPT San Juan GHC, OPT Okanogan CHP Ferry CHP Stevens CHP, GHC/OPT (Partial) Skagit CHP, GHC, OPT, RBS Island GHC, OPT, CHP Clallam RBS Snohomish CHP, GHC, OPT, PC, RBS Chelan CHP Jefferson RBS Spokane CHP, GHC, OPT Douglas CHP Kitsap CHP, GHC, OPT Lincoln CHP, GHC/OPT (Partial) King GHC, OPT, PC, RBS, CHP Mason CHP, GHC, OPT, RBS, PC (partial) Grays Harbor CHP, RBS, GHC/OPT/ PC (Partial) Grant CHP Pierce CHP, GHC, OPT, PC, RBS Whitman GHC, OPT Adams CHP Kittitas GHC, OPT Thurston CHP, GHC, OPT, PC Pacific RBS, CHP (partial) Lewis CHP, GHC, OPT, PC, Kaiser (partial) Franklin CHP, GHC, OPT Garfield Yakima CHP, GHC, OPT Benton CHP, GHC, OPT Columbia GHC, OPT Cowlitz CHP, Kaiser Wahkiakum Kaiser ((Partial) Walla Walla CHP, GHC, OPT Skamania CHP, Kaiser (Partial) Asotin Klickitat CHP Clark Kaiser, PC 23,313 RegenceCare members will need to choose a new plan (Regence BlueShield includes all RegenceCare service areas & providers) CHP as Partial in Pacific new for 2005, 2 Counties with no MCO (815 members) & 1 County with partial coverage (approximately 299 members)

  11. Procurement Results Premium Increases, Active Non-Medicare: • Budget Assumption 15.0% • Procurement Results11.1% • UMP= 13.2%, UMP Neighborhood=14% • MCOs=9.5%

  12. Procurement Results2005 Active Non-Medicare Employee Contributions

  13. Procurement ResultsIncrease in Average Employee Contributions

  14. Procurement Results Premium Increases, Medicare Retirees: • Budget Assumption 21.5% • Procurement Results (UMP & MCOs) 21.8% • UMP= 31.5% • MCOs= 11.4%

  15. Procurement Results2005 Estimated Medicare Retiree Contribution

  16. Procurement ResultsIncrease in Medicare Retiree Subsidies

  17. FUTUREDIRECTIONS

  18. Board Vote on 2005 Employee Contributions

  19. Board Vote on 2005 Retiree Subsidy 2005 Retiree Subsidy= $116.19 * Rates shown above for the Medicare Advantage Plans are subject to change based on CMS Medicare Advantage Rates.

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