Public Employees Benefits Board

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 PEBBs 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 COVERAGE PURPLE
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

Whitman GHC, OPT
Pierce CHP, GHC, OPT, PC, RBS

Adams CHP
Kittitas GHC, OPT
Thurston CHP, GHC, OPT, PC
Pacific RBS, CHP (partial)
Franklin CHP, GHC, OPT
Lewis CHP, GHC, OPT, PC, Kaiser
(partial)
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 Results 11.1
• UMP 13.2, UMP Neighborhood14
• MCOs9.5

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
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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.