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Lafayette Parish School System Joint Meeting of the Board Insurance Committee & Employee Insurance Advisory Committee May 2006.

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Presentation on theme: "Lafayette Parish School System Joint Meeting of the Board Insurance Committee & Employee Insurance Advisory Committee May 2006."— Presentation transcript:

1 Lafayette Parish School System Joint Meeting of the Board Insurance Committee & Employee Insurance Advisory Committee May 2006

2 2 Healthcare Finance Overall Benefit Plan Cost Trends-Nationally Medical Component 8 – 10% annual growth expected for 2006 – 2007 Prescription Drug Component 12 – 14% annual growth expected for 2006 – 2007 Risk or Reinsurance Component 15 + % annual growth expected Administrative Component Expected cost based on plan type  Current plan type 5%–8% per year

3 3 What’s Driving the Costs? For all plans Improved medical and pharmaceutical technology Trend expected to continue Deciding what to cover People living longer, when most costs are incurred Rapid growth in prescription drug component For LPSS plans Same as above Amplified due to LPSS demographics Growing work force and retiree population

4 4 LPSS Benefit Design Annual Deductible In-Network$500 Co-Insurance Percentage In-Network Out-of-Network 80% 60% Doctor Office Visit Primary Care Specialist $30 Deductible + 20% Out-of-Pocket Maximum In-Network$3,000

5 5 LPSS Benefit Design Rx Co-pays Generic Preferred Non-Preferred Retail $10 $25 $50 Mail 2x’s Retail Copay Maximum Days Supply3490 Rx Deductibles $100

6 6 LPSS Current Situation Partially Self-Funded LPSS claims (over $30 million per year) paid from Board and participant contributions Primarily a “Fee for Services” plan with PPO Network discounts LPSS determines plan design Blue Cross provides claims payment, doctor and hospital contracting and re-insurance Relatively low administrative costs Pharmacare provides PBM administration Administers prescription program for LPSS Retail and mail order prescriptions

7 7 Fiscal Year July 1, 2006 – June 30, 2007 Accrual Rate Projections Current Premium$ 30,559,929 Required Premium$ 33,860,277 Proposed Increase$ 3,300,348 Percent Increase10.8 % LPSS Financial Situation

8 8 Benefit Plan Options Plan Options 1-5 Different Deductible & Copay Options Board options on funding Insurance Committee Recommendation Plan Option 4 Increase Deductible from $500 to $750 (01/01/07) Eliminate PCP Copay (01/01/07) Increase Premium 7.3% Benefit Alternatives

9 9 Option 1 No change to current benefit 10.8 % increase in premium: July 1, Benefit Alternatives & Premiums

10 10 Employee Mo. Premium100% LPSS Difference 50% LPSS Difference 68% LPSS * Difference Employee$77.22$0$105.67$28.45$95.43$38.70 Employee + 1$243.53$0$271.98$28.45$261.74$38.70 Family$372.32$0$400.77$28.45$390.53$38.70 Retiree w/Medicare$41.59$0$70.04$28.45$59.80$38.70 Retiree w/o Medicare$77.22$0$105.67$28.45$95.43$38.70 Retiree + 2 w/Medicare$288.65$0$317.10$28.45$306.86$38.70 Retiree + 2 w/o Medicare $372.32$0$400.77$28.45$390.53$38.70 Option 1 – $500 Individual Deductible – 80/60 Coinsurance – $3,000 OOP Max/Individual – $30 PCP visits – $100 Rx Deductible –$10/$25/$50 Rx Drug Co-pay *Current Board Contribution Level Benefit Alternatives & Premiums

11 11 Option 2 Increase deductible from $500 to $750 Effective January 1, 2007 Half-year effect: 4.5% x 50% = 2.25% Increase premium 8.55% Effective July 1, Benefit Alternatives & Premiums

12 12 – $750 Individual Deductible – 80/60 Coinsurance – $3,000 OOP Max/Individual – $30 PCP visits – $100 Rx Deductible –$10/$25/$50 Rx Drug Co-pay Option 2 *Current Board Contribution Level Employee Mo. Premium 100% LPSS Difference50% LPSSDifference 68% LPSS * Difference Employee$77.22$0$99.75$22.53$91.64$30.63 Employee + 1$243.53$0$266.06$22.53$257.95$30.63 Family$372.32$0$394.86$22.53$386.74$30.63 Retiree w/Medicare$41.59$0$64.12$22.53$56.01$30.63 Retiree w/o Medicare$77.22$0$99.75$22.53$91.64$30.63 Retiree + 2 w/Medicare$288.65$0$311.18$22.53$303.07$30.63 Retiree + 2 w/o Medicare $372.32$0$394.86$22.53$386.74$ Benefit Alternatives & Premiums

13 13 Option 3 Eliminate PCP co-pay Effective January 1, 2007 Half-year effect: 4.5% x 50% = 2.25% Increase in premium: 8.55% Effective July 1, Benefit Alternatives & Premiums

14 14 – $500 Individual Deductible – 80/60 Coinsurance – $3,000 OOP Max/Individual – Eliminate PCP Co-pay –$100 Rx Deductible – $10/$25/$50 Rx Drug Co-pay Option 3 *Current Board Contribution Level Employee Mo. Premium 100% LPSS Difference50% LPSSDifference 68% LPSS * Difference Employee$77.22$0$99.75$22.53$91.64$30.63 Employee + 1$243.53$0$266.06$22.53$257.95$30.63 Family$372.32$0$394.86$22.53$386.74$30.63 Retiree w/Medicare$41.59$0$64.12$22.53$56.01$30.63 Retiree w/o Medicare$77.22$0$99.75$22.53$91.64$30.63 Retiree + 2 w/Medicare$288.65$0$311.18$22.53$303.07$30.63 Retiree + 2 w/o Medicare $372.32$0$394.86$22.53$386.74$ Benefit Alternatives & Premiums

15 15 Option 4 Increase deductible from $500 to $750 Eliminate PCP co-pay Effective January 1, 2007 Half-year effect: 7% x 50% = 3.5% Increase premium 7.3% Effective July 1, Benefit Alternatives & Premiums

16 16 Employee Mo. Premium 100% LPSSDifference50% LPSSDifference68% LPSS*Difference Employee$77.22$0$96.45$19.23$89.53$26.16 Employee + 1$243.53$0$262.76$19.23$255.84$26.16 Family$372.32$0$391.55$19.23$384.63$26.16 Retiree w/Medicare$41.59$0$60.82$19.23$53.90$26.16 Retiree w/o Medicare$77.22$0$96.45$19.23$89.53$26.16 Retiree + 2 w/Medicare$288.65$0$307.88$19.23$300.96$26.16 Retiree + 2 w/o Medicare $372.32$0$391.55$19.23$384.63$26.16 – $750 Individual Deductible – 80/60 Coinsurance – $3,000 OOP Max/Individual Option 4 *Current Board Contribution Level – Eliminate PCP Co-pay –$100 Rx Deductible – $10/$25/$50 Rx Drug Co-pay Benefit Alternatives & Premiums

17 17 Option 5 Increase deductible from $500 to $1,000 Eliminate PCP co-pay Effective January 1, 2007 Half-year effect: 7% + 4.5% x 50% =5.75% Increase premium 5.05% Effective July 1, Benefit Alternatives & Premiums

18 18 Employee Mo. Premium 100% LPSSDifference50% LPSSDifference68% LPSS*Difference Employee$77.22$0$90.53$13.31$85.74$18.09 Employee + 1$243.53$0$256.84$13.31$252.05$18.09 Family$372.32$0$385.63$13.31$380.34$18.09 Retiree w/Medicare$41.59$0$54.90$13.31$50.11$18.09 Retiree w/o Medicare$77.22$0$90.53$13.31$85.74$18.09 Retiree + 2 w/Medicare$288.65$0$301.96$13.31$297.17$18.09 Retiree + 2 w/o Medicare $372.32$0$385.63$13.31$380.34$18.09 – $1,000 Individual Deductible – 80/60 Coinsurance – $3,000 OOP Max/Individual Option 5 *Current Board Contribution Level – Eliminate PCP Co-pay – $100 Rx Deductible – $10/$25/$50 Rx Drug Co-pay Benefit Alternatives & Premiums

19 19 Option 1 Option 2 Option 3 (No. of Contracts: ) Premium Alternatives *Current Board contribution level

20 20 Option 4 Option Premium Alternatives *Current Board contribution level


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