18
HEALTH BENEFITS UPDATE
NEW JERSEY COPS ■ AUGUST 2014
The changing face (and cost) of our health benefits
Kevin C.
Lyons
As the 2015 renewal rates are set, I thought it would
be a good time to address some concepts and strategies that we can all take part in to try to control the
cost of our health benefits. I am dividing this article
into three sections: The increases in the State Health
Benefit Plan Rate; strategies to increase the effectiveness and control the costs of health benefits in the
state where health benefits are the most expensive;
and future delivery methods that will allow us to control costs going forward.
The State Health Benefit 2015 rates
On July 17, the State Health Benefits Commission met to adopt the
2015 rates for the State Health Benefits Plan. The rates, which are created by Aon, the actuary appointed by the State Treasurer, were
approved three-to-two along the line of management and labor.
Most of the “cost saving” measures suggested by the actuary were
simply cost-shifting to the employees in the form of higher copays,
deductibles and coinsurance, all of which would shift more financial
responsibility to our members.
Also, you will see that Aon has once again shifted the rate increases toward members with dependents. They have stated that this was
to compensate for mandates of the ACA that require children to stay
on their parents’ benefits until age 26. One can easily deduce that the
shift might be a way to move the children off of the State Plan earlier.
Strategies to increase the cost effectiveness of health care
There are a few things that can be done by each of us to
increase the cost effectiveness of the health care we use as consumers. Please take note that I am in no way suggesting that you
compromise what you believe is the best care for your family, but
please take these suggestions under consideration when making
your health care choices.
1. Emergency Room care: If there is a situation that you can
utilize a primary care physician or an Urgent Care Center,
try. We all know that there are situations that you must use
the ER, but if it is a minor injury or illness, the emergency
room bills at a rate much higher than a physician does.
Whether or not this has to do with charity care doesn’t matter. If we direct ourselves to an office, the plan’s cost will
decrease as the premium rates are directly related to the cost
of the entire enrollment and divided back against that
enrollment. If overall costs go down, then premiums will stabilize.
2.
Wellness: It stands to reason that if we are healthier then we
will use less services and our premiums will be affected. Get
your yearly physical; preventative care will save you both in
quality of life and in your wallet. The NJ Well program
requires a minor screening and an online survey (after
which for 2014, you will receive a $100 Visa gift card). Information is on the State Health Benefits web site. If you are
outside of the SHBP then call and ask your plan adminis,
trator if they offer any such plans.
3.
Prescription drugs: I know that it may be a shock, but prescription drugs are one of the biggest cost drivers in health
care. While there have been miraculous advances, the costs
of some of these drugs are nothing short of astounding,
ranging into the tens of thousands per month. While there
are not many options with those drugs, don’t fall prey to
couponing or discounting. It may save you a few bucks at
the cash register, but it is costing you in premiums. Generics should be utilized whenever practical. The State Health
Benefits Plan has a very low generic utilization rate compared to national numbers. Give them a try if you can; they
will save you at the cash register and on premiums.
LOCAL EMPLOYER 2015 RATE INCREASES
Actives
PPO Medical
HMO Medical
PPO Rx
HMO Rx
Single
Ee+Spouse
Family
Ee+Children
8.9%
4.4%
7.5%
7.5%
6.3%
3%
5%
5%
10.4%
3%
9%
9%
13%
9.5%
11.6%
11.6%
5%
5%
11%
16%
5%
5%
11%
16%
1.9%
3%
10%
10%
1.9%
3%
10%
10%
Early Retirees (Under age 65)
PPO Medical
HMO Medical
PPO Rx
HMO Rx
5%
5%
11%
16%
5%
5%
11%
16%
Medicare Retirees (65 and over)
PPO Medical
HMO Medical
PPO Rx
HMO Rx
1.9%
3%
10%
10%
1.9%
3%
10%
10%
STATE EMPLOYER 2015 RATE INCREASES
Actives
Single
Ee+Spouse
PPO Medical
6.2%
6.2%
HMO Medical
3.9%
2.9%
PPO Rx
5.9%
5.9%
HMO Rx
5.9%
5.9%
Early Retirees (Under age 65)
PPO Medical
5.2%
5.2%
HMO Medical
6.9%
6.9%
PPO Rx
14%
14%
HMO Rx
18.5%
18.5%
Medicare Retirees (65 and over)
PPO Medical
3%
3%
0%
0%
HMO Medical
PPO Rx
10%
10%
HMO Rx
15%
15%
Family
Ee+Children
10.3%
6.8%
10%
10%
12.9%
9.3%
12.6%
12.6%
5.2%
6.9%
14%
18.5%
5.2%
6.9%
14%
18.5%
3%
0%
10%
15%
3%
0%
10%
15%
Future delivery methods
One of the trends around the country is for the insured to own
comprehensive healthcare facilities. Palm Beach Firefighters
have such a facility and it has been enormously efficient in delivering health care. In this model, the fund owns the building, the
equipment and employs the health care staff directly. This model
does not allow for unscrupulous practices with regards to billing
or prescription drug issuance. The benefits in this model are
twofold: one is that the costs to the plan a