The PEB Board held its monthly meeting March 21, 2018. A short summary follows. A briefing book offers more details.
This report primarily focuses on issues related to retirees, both those who are pre-Medicare eligible and those that are Medicare eligible and choose PEBB insurance as their supplemental health policy.
The most interesting fact that came out of the meeting concerns risk pools. The claims history and demographic make-up of these pools are the primary drivers for rates. This year, for example, the UMP Classic insurance rates (commonly referred to as the “Uniform Medical Plan”) paid by Medicaid retirees increased $55.51/month. Why? Well, two main drivers affected these rates. One, was the increased use and cost of prescription medications (61% of the claims). The other is the fact that the Medicare retirees are in a separate risk pool. (Non-Medicare retirees are in the regular PEBB risk pool.) Clearly, having older members with probable health issues due to aging makes for expensive claim experiences. This rate increase, particularly for those Plan 1 retirees who have not had a cost of living adjustment since 2011, is a hardship. In fact, this increase is a hardship for anyone living on a fixed income. It’s important to remember that Medicare retirees already pay a minimum $105/month for Medicare.
Kaiser Medicare Advantage plan rates are not as volatile since they receive direct dollars from the Centers for Medicare and Medicaid which offset any potential rate increase. UMP is self-insured and does not receive Federal dollars, aside from the Retiree Drug Subsidy. (See below)(A reminder that due in December 2018, the School Employee Benefit Board (SEBB) is to make recommendations as to whether the Medicare retirees remain in PEBB or shift to SEBB.)
Some facts regarding enrollments:
- Non-Medicare retirees: 6,700
- Medicare enrollees: 92,603
- Total PEBB Enrollment for Members and Non-Medicare Retirees: 285,772 (2018)
The 2018 Supplemental Budget increased the retiree health insurance subsidy from $150 to $168 beginning January 2019. This was primarily done to ensure that the $20 plus million dollars the Health Care Authority (HCA) for its Retiree Drug Subsidy continues.
What can be done to address the rate increases?
There are many options that the PEB Board could consider. All would require fiscal analysis. Some ideas could include:
- Change the formulary in the UMP. The Board has some jurisdiction over setting up different parameters of the formulary.
- Move Medicare eligible retirees into the PEBB risk pool, or the SEBB risk pools to share claim and demographic experiences.
- Increase the health subsidy for retirees from present $168/month. This recent increase is for 2019 only. After that, without legislative action, the subsidy will revert back to $150/month.
- Offer more plan and resulting cost options.
- Discontinue prescription coverage.
- Offer separate prescription insurance.
Other items of note:
There was a presentation on the NW Prescription Drug Consortium which includes Oregon and Washington entities. This primarily benefits those individuals who do not have prescription coverage and must pay cash for their prescriptions. It is open to enrollment by individuals. It negotiates drug prices and discounts available when using its free Pharmacy Discount Card at participating pharmacies. Discounts range from 20%–80% depending on use of generic or brand name drugs.
Read more for information, including free enrollment.
The last presentation concerned an overview of discount programs available to subscribers and their dependents of PEBB. These include such examples as Silver Sneakers (a Health club discount program available to eligible seniors), vision products, LASIK, alternative medicine treatments, hearing aid products and services and more.
Links to more information:
* Kaiser member perks
* Public employee plan discounts
The link given at the start of this report contains more detail for those interested. Feel free to contact me if you have further questions.
Fred Yancey
The Nexus Group, LLC