ALC-Executive Subcommittee

Merrifield make you wait you see to get started is amended. Voting members We called order the AOC executive subcommittee for the purpose this morning of hearing from the single group thank you for being here welcome back and we will turn it over you for presentation I feel good about yourself as you go or all at once I would like. Colin's Senators. Patrick Klein Siegel. Either I can beer with single. Kersting zero. Kirsten Chapman with single. If you will a polo you can pull March closer to you will. Are we all here good some of the more impaired in other. Okay go ahead thank you. Good morning everyone over the next two days we were gonna do for presentations today were looking at a benchmark study and some information on Medicare advantage opportunities tomorrow we'll have a clinical review and then some pharmacy information. And before we kick off the bench marking I just wanna give you an update on the data request so we have now received everything that we've requested as of late last week. Matthew Emmons So we'll start off going through the the benchmarking study that we pull together for both and see and and PNC employees I start with some background will go through some some benchmarking details on on the plan details some of the specifics around costs and contributions I go through actuarial values and and different plan values and ways of looking at the programs we'll talk through high level some retirees strategies that we see that all sort of T. up some of the things that Kristen will be talking about as it relates to Medicare and then we've we've pulled together and and appendixes well that summarizes some of the same aspects that will be talking to on single contributions for for your family plan contributions for the program. So as as background for the the benchmarking study that we pull together this is gonna go through some of the plan features for your active health health programs they were compared against the targeted comparison group of different state plans and national averages it we've broken this up separately for ANC and PAC we'll go through the premium classic and basic plans for both programs. Implants are classified as H. M. O.'s as part of this and the other two plans are classified as high deductible health plans as as part of the analysis you'll see throughout this presentation will broken up some of the analysis and comparisons of nine HDHP style plans to high deductible health plans separately so that'll be broken out throughout from benchmarking state comparison analysis we look at the neighboring states around Arkansas so Oklahoma Missouri Tennessee Mississippi Louisiana and Texas are included specifically under the identified in the analysis but those are the plans that will be included when we look at plan my plan on on on that basis from a a data collection perspective we looked at the different styles of plans that are offered PP owes an HMO is high deductible health plans and and other style plans that are that are included in the different states I would pull plan design information deductibles copays coinsurance and and that type of information to determine the actuarial value of those programs we pulled current costs for all the the separate states that we looked at as well as your own and the different benchmarking announces that we looked at you'll see some some different benchmarking groups that'll be compared against one is the benchmark states are those of the six states that I mentioned that of the neighboring states around Arkansas the B. the Arkansas plans it'll be pulled out specifically as part of the analysis we've also pull the national benchmarking analysis that we've done for state plans throughout the country that we house that's that's based on twenty eighteen state employee health benefits information that we collect at Siegel are we also have a cause database which is colleges and universities that's based on twenty twenty information and then there's various private sector employer information that we pulled in as comparisons throughout that will use to to compare against a program. If there's any questions representation just jump in and ask some of the grass that will get to further down the presentation of pretty complicated so we wanna make sure we answer your questions I also have this new laser pointer feature so I'm trying to use that to highlight some of things I'm talking about it is first time using it so. Okay. So the first like to summarize the types of plans that are offered by the various benchmarking states that we looked at this is broken out to PPO high deductible in CD H. P. plans are consumer driven health plans an HMO style plans you'll see here all of the benchmark states offer both PPO plan and a high deductible health plan in two states offer a HMO style plan Arkansas agency to there to the right as is sort of called out offering high deductible health plans and HMO plans to to the employees for both A. Essie NPS employees from private sector perspective I generally the the large majority of plan sponsors are offering a PPO or consumer driven style plans lesser percentage about a third of employers are offering HMO style plans to to their. Next light goes into the tier structure so this is the number of different contribution tears that are offered to employees in order to enroll in the plan the majority of states that we see that we pulled in from our from our database I stated base or using a a four tier structure which is what is used in Arkansas three and four tiers represent the vast majority of overall states there are some other strategies that are used throughout the country but but but Arkansas falls in line with with the majority of of what states are doing it relates to the different contribution to yours that that are offered to employees they make you go back to school and the other slow and. So I guess the thing to note on this is everybody's got a high low sort of option designed but looks like most or more high deductible PPO Sir I option where you guys are high deductible HMO so that's that's the only distinction so I don't know how important it is but it's like you just ninety one point that Yeah and you'll see when we get into the ABC structure it sort of falls in line with the censor the the high plan offering which is an HMO style plan here and then lower actuarial value plans are also offered as well as the the higher deductible structure. So then at the next light here goes into the the single con the single premiums that are offered to employees and we've broken this out as the various across the various benchmarking is that you'll see these this color scheme what will try to we try to keep this throughout so the the the light blue eyes the national average from our database yellow is the the cubs database with colleges and universities are the benchmarking states are in the dark blue and then the very issues purple or the state employees and the public school employees so this again is broken out by A. S. C. and PSE we see this single premiums for for these plans generally falling below benchmark so that that what we see here so this is that the total premium offered to employees falling in lower than the overall cost that we see against the various benchmarking states and the the benefits surveys that we've done for colleges universities. Yes the other thing on that is. Remember the non HHV that's where the premium plan will fall and then in this example the high deductible health plan that's a blend of the classic and basic with more membership in the classics so um it's weighted average. This next I. breaks out the family premium so this is the the fourth year that's offered to employees it generally takes a bit higher closer to benchmarks but I still remains lower than the overall Overall benchmarking structures but again Sir closer to what we see from from benchmarking states as it relates to the overall cost of family premiums but generally pretty pretty reasonable in terms of the cost relative to what we see and in other states and and and other surveys that we've done so the one I think that is in taking into account this whole thing is any cost sharing going on so whatever the numbers pain this isn't taking into account yet we do that later on so in general you think low cost is good rate because your total premium look we could have a significant cost sharing going on which is bringing the total cost down so we'll go through all that will show that but just just yes good that lower premium total should be more efficient and cost effective but they might be a lot of questions going on some. And this this one is is. The the tier structure so this breaks out the relative cost of the plan differential between the the family premium and the single premium so this is the multiplier so if you look at the the single premium your family premium is two point eight nine in the case the H. B. H. B. H. H. P. plan two point eight nine times the cost of the the single plant and how that compares to the other states on the bench marking numbers that we have in here to tick higher it would imply that dependents for your state or are a bit more expensive it could just be a strategy and overall strategy in terms of the way the contributions to develop but generally the the costs of the family premiums are at a higher overall well relativity to the the single premium for the the state employees and public school employees relative to what we see for other benchmark is the. To kind of look at the the cost share one of the one of the fees the cost sharing there's the the cost of utilizing the program copays coinsurance deductibles there's also the cost of participating in the plan so in order for employees to enroll in the program they're paying a contribution to participate I'll note here the contributions that were showing do take into account the wellness credit that is provided to employees so there's a fifty dollar offset in premiums for those that participate in in the wellness program that's offered through the state that is reflected in the numbers that are showing here so if that's not taking into account these numbers would be it would be higher than what are what are shown here so these these numbers most the premiums for the high deductible health plans relatively competitive with what we see for the the national average benchmarking states and the other surveys that we've done for the nineties the H. P. plans the the cost to participate in a program is a bit higher than what's what's seen in our benchmarking states and and other surveys that are that are pulled together so a bit more costly to participate in the programs on the the the higher end plans that you office year your premiums line is a bit more expensive to participate in our the HDHP plans with your at your lower cost plans I tend to be a bit more competitive relative to benchmarks. I guess the only other point here on on site ages to jump back it is more expensive are significantly more expensive public school. State employees to participate in the program and that sort of that's that light purple bar off to the rate that you'll see there for for single contributions for those those participants. This this next line breaks out similar concept but it's for family participation so for for those that are rolling in in family plans a similar a similar story here that's what we see on the single sign on the H. the H. P. plans are costs relatively competitive against what we see for benchmarking states and programs that the national state survey is a little bit lower overall but when we compare to the benchmarking states in the surrounding area and because database for your HDHP plans the the contributions for family plans are are relatively competitive for the nineties the H. P. pants for state employees the number is is a bit more comparable to what we see for benchmarking states or more competitive the benchmarking states but higher than the national national average income stated database that we have for a public school employees that number is is a bit more expensive for participation in the family plans falling above all of the benchmarking categories that we pulled in. Thank you Mr Mr Lehman related thank you For clarification when you talk about how to double health plan verses nine hundred that will. What's the difference there was definition difference yeah so it for for your plans what we've we've classified the the classic in the basic plans in the high deductible health plan category and the non HDHP plan would be the the premier plan premium excusing the premium line for that are offered to both state and and is there a monetary number between the double high deductible I mean the out for high deductible we classified plans generally that were qualified high deductible health plans are there one or two plans that had deductibles in the neighborhood of two thousand and above that weren't technically H. the H. P. qualified that would block it into the H. the H. P. group of a generally it's the qualified high deductible health plan rules that that came into play in terms of the classification of issues. And the women on a deductible for to be qualified as fourteen hundred dollars. So that's the the minimum but then there can't be any first dollar coverage so no copays it's got all you have to meet your deductible before any insurance kicks in Mr chairman I had a question on page one if I could ask that again now. one page one there were it shows the private sector and the percentages. I'm sorry Page three line. Those percentages is that all of the states that were looked at can you can explain that. What that percentage means yeah that's that's from Kaiser so they did a study it's a it's a nationwide number and there they worked at the private sector and employers over five thousand large groups so you got a bunch percentages on this page I guess the the six is the benchmark states right so that will your surrounding states also redundant and then the second one hundred percent that's all the statewide average is correct and the hundred percent would represent six of this expense parking states non time at the eighty four percent seventy one percent thirty two percent yep that's so that's the number of large employers nationwide or five thousand lives that offer a PPO plan that this is an attack plan all right thank you and and just one clarification back to your other question we're talking about high deductible health plans and what's qualified with a fourteen hundred dollar minimum deductible what qualified means is that you can set up an HSA. Taxed up even tax deductible. And we pull an HSA money in there too they had ages and. US vied okay. Right here. Okay personally thank you okay. Okay so this this next slide this is just a different way of looking at the overall cost share for the program we looked at the premiums and contributions for for the program this sort of takes those numbers and as an overall percentage of the overall cost compared to the different benchmarks that we had in place so on the left here we're breaking out the percentage of the contribution for plans in order to participate in in the program so as an example for a national average the the cost share for single premiums on average is fourteen percent so as an average of total total premium employees are required to read to pay fourteen percent of the overall cost on national average basis similarly for Cobb sixteen percent the benchmarking states that we use seventeen percent this compares to the various ANC and PSC clients that are offered it in general and see plans are a bit higher on the the premium side but more in line from a classic plan perspective and and pretty competitive as it relates to the the basic plan on average slightly higher overall relative to a benchmark for for a a C. R. PS the wrote requires a bit higher contributions relative to the overall cost of the premium from a comparison to benchmark overall it's it's a slightly higher than what we saw FOR for ASC. Yes if you think about you know the first couple sides Matt look at your premiums are lower right and your and your contributions for about higher so we're putting those two things together that's why the percentages for the state plans are a little bit higher than. The good thing is you know hundred percent plan rate I mean no contribution. Which is okay we'll many states that have that in the benchmarks around this yeah again I mean that that does reflect the wellness contribution of the wellness Office of but the the majority of employees that and those plans are taking the ones. And this is a similar slide what we showed on the single side I just for family contributions national average nineteen percent as a percentage of premium that employees are required to to pay in Cobbs is closer to its twenty four percent benchmarking states a little over a third of the premium at thirty four percent is required for participation from a state the state Arizona state employee at the Arkansas state employees the premium share is is a bit higher on the premium side more in line with some of the bench marking the classic and and again at at basic but on on the whole are relatively more expensive then we saw from a benchmarking perspective and similar to what we saw on the single contribution side public school school employees are are required to pay a bit more as a percentage of overall premium as as I just mentioned the premiums are higher on the public school employees side so it's it's not surprising to see higher percentages of overall premium that required to to be paid in order to participate in the program so so overall from a a contribution basis we're seeing a higher percentage. Relative to benchmarks that employees are required to pay from both the single and family contribution perspective of the overall premium. All right now we're gonna. The next couple slides we're looking at the regional other regional states that we compared you against the neighboring states and we look at each plan designed specifically so these these are graphic a little more complicated and busy so we have eleven plans in the benchmark for the high deductible pool and then the non high deductible we have twenty plans so the first comparison here is actuarial value this is really the the value of the benefit so what we do here is we look at the deductibles the co pays the coinsurance out of pocket Max all that information we entered into our pricing model and then in theory you know we're figuring out how much the plan picks up when the member goes to the doctor versus what the member picks up so so Davey is a president that the plan picks up and. When we look at the comparison here the basic plans for both the state in the public schools fall near the bottom of the scale but you know that someone intentional right because that's a I'm like a catastrophic plan it's a free plan for the state your classic plan that has more membership your that seventy eight percent level will not put you right in the middle of the pack compared to the other high deductible plans. The actual values discussed a lot nationally and in general if you have any questions on it in general it's just what percent of the total expense for somebody going to see a medical visit or the pharmacy visit does the plan pay so in general you know plans pain yes pick up seventy percent of the cost members picking up is twenty two percent in addition to that the members pains contribution to these guys employee contribution then this twenty two percent so that's kinda like when we go later through this look at the whole picture you know where they really picking up and compare that to everybody else. And one thing I forgot to mention so. These bars that are a little darker little bolder less transparent those are the The Arkansas plans. So now The comparisons for the nine high deductible plans so This Is Your premium plan versus other PPL as an HMO because again there's there's twenty plans that we're looking at here the premium plan for PSE and Essie fall pretty much in the middle at that eighty four eighty five percent actuarial value so. In general your plan designs They feel like they're at the right value you know they're not too rich they're not to lean so you know the weather designs we don't really have a huge issue with thank you. Okay so this like it's a lot more complicated We have two things that we've already talked about the actuarial value is this wine and then our bars or this the total single premiums. That Matt talked about before and can you mentioned you know the premiums really a component of. The plan design so if you ever really rich plans line you'd expect the cost to be higher so in theory. You'd expect since this is sorted from low to high on the actuarial value standpoint you expect these bars to. Grow as we go from left to right and they do somewhat there's a you know not wired you're there but this is just an example to show putting those two components together. So we did the same thing for the non high deductible plans. And again the yes he is the light purple and AS sees that dark purple. This is kind of hard to to compare when you see it like this but the next slide we we normalize everything and we showed a different fashions it should be easier to look at. Okay so. Here we have a a stacked bar down below is the employer contributions than this metal piece is the employee premium if you put that together that's your total premium what we've added here is the employee out of pocket costs so a plan with a higher actuarial value that's gonna be really low a plan seventy percent plan like the basic plan you can see that this is much you know a much bigger chunk on the bar graph so essentially what we're doing is we're normalizing all the premium rates for actuarial value so they're on the same plan design and. What we like to see here is these bars to be lower that shows the plans more efficient in the area so It looks like the the PSE plans are here at the lower end of the range more efficient and then if you move up to the ANC plans there on the higher end of the ring. Any questions about that. So for the non high deductible plans the same same luck here it actually flipped so AS the the premium plan is like the six mark most efficient plan out of the twenty that we show PSE is it's time to write a mental. I guess in general these two charts are showing you for all the other state plans that are out there how do you guys compare cost wise like total cost for member to have that benefit it would be is the plan premium the employee contribution employee cost share all that with like a top line number this is what they get they get paid for that that visit so yeah the right vendors are you managing and all that stuff we look at it it's like a middle road I mean the H. D. H. P. is a little lower and the next one's kind of in the middle I mean the the the best by you want to be is all the way to the left you know you're going to be the most efficient plan with the lowest cost that's where you want to be. So we get some there there we get others that are at the end you know so you're in the middle okay you know it's not not great not bad and you just read the mental so. Yeah I mean the the perfect situation I can set is to be on the far left so that means you have a a very rich benefit with low cost and the way you get there is maybe the health of the population the vendor so you have in place all those things play a part And driving that cost down even at a high level. Number looking at the total employee spanned so there's two components there's what comes out of the the monthly contribution so the employee people we call the employee premium that. That's the bottom part of the stack bar in the top part is what employees pay out of pocket when the use the plan. So you put those two things together this is the total spend and. For comparison purposes the basic plan the right middle but the classic plan their employees are paying more than the other plans in comparison. Okay we've got a couple questions represented Dotson you're recognized. Thank you Mr chair over to your right here It could you go back to page seventeen or sixteen here and just go through the. Backronym to the bottom as you go along there I'm I'm not sure what the. Dash HMO one or the F. PPO to water I mean I I get what the PSE and the ANC in the class of premium all that how do we compare read this from left to right since the PPO the PPO one is the. Most efficient with the richest benefits. So the other plans like ABCD E. those are all that the identified those of the other states so we we just the identified it and then you know if they have like for example T. they have to high deductible plans so that high deductible to which is the most efficient and then if you look further to the right there's another the so I have a second I deductible plan does that clarify. The you said there the other state is this the benchmark states these are yeah these are all the neighboring states so that's the the cumulative A. B. C. D. E.. Of other states average. So if a state so for example the let's just say it's Louisiana since its since we have two plans here they have to hide a couple plants that we're comparing you so those are specific states you just didn't identify which states that yes correct the letters really their area. And and specific plans is there a a. Table of contents somewhere that identifies which states which. We have a. We have in the identified but we can give if you give it to you if you want those are just the six other surrounding states A. B. C. D. E. S. correct you have been identified for the I just wanna be clear so I know where we're at thank you so much and in the states that are actually the benchmarking states from page to. Oklahoma Missouri Tennessee Mississippi Louisiana and Texas. But we can get a crosswalk Thank you representative Senator Hammer you're recognized. Thank you Mr back to page seventeen you made a comment I want to go back and just drill down a little bit. You said if I understood your right that when you look at page seventeen we want to be the bar all the way over to the left is that correct that's yes okay so what I wanted to know and maybe this is for Stafford jointly together within your scope of work for this contract. Are you going to identify what to prohibit or so are as far as getting us to the far left we can put all the money in this if we want but if we don't change behavioral habits of the participants or the environment that they're working in and address those issues to me that's gonna be the crossroads we're gonna get to lower premium so things like are there enough providers orders or lack of access to providers in certain areas like we're teachers maybe teach in the delta or they can't get off work to go to the doctor and would that also include of the habits of the participants or scope of practice bears are you going to give us a punch list of the things that are the prohibit orders that are keeping us from moving to the far left yeah that's our approach and you'll hear tomorrow I guess Joanne's gonna talk a lot about the clinical aspect of its social talk about a lot of things you're talking about is there barriers are there now are there opportunities we can do certain things differently you know and then in addition never look at a cost structure we just got the data last week's will be looking at you know you have the right networks and placing or give any we provider areas things like that will be looking at. And then in the other states that are ahead of us that are further to the left side of the graph. Are we or what you're gonna bring is that going to compare say like to Oklahoma Oklahoma is doing this and they've got lower rates under this just illustration Oklahoma's doing this this and this and they're getting lower you know lower cost because they're doing this you're doing this you need to be more like Oklahoma. Somewhat I mean some of the stuff we don't have all the details on what we don't have their you know their network discounts Oklahoma things like that but as far as Arkansas Oklahoma doing something that you guys you looking at that you know it seems to have a good impact on them yet we will look at that as part of a benchmarking okay thank you thank Mr. Senator Hickey you're recognized. Representative dot. It again it would take. There you go thank you Mr Just. Going back to that we'll which state is the. And I'm sorry what you're looking for that I walked in a few minutes let you my very cover this but according to Page three there is this saying that one Arkansas doesn't have any PPO plans none of them are considered PPO Office. Yeah that's right okay D. C.. Okay so question we have please proceed. About the photos so you'll. We may have to clarify and get you the exact okay I don't want to committees nine hundred percent. If you find a lighter only for a lot of Eloise impatient people interview with your presentation will will come back down to Missouri or Mississippi. Somebody the ceiling at. As we are unemployed cost sharing anything you know the big takeaway is on there is a significant amount of cost sharing in general compared to your neighboring states and actually I'm really struggling to hear you if you will let my cap little bit your your voice is just is a certain level I hear you. I'm mumbling so it in general I think from the cost sharing slide it does show that you have a significant amount of cost sharing for your employees me compared to your neighboring states and then early on even when compared to the national averages private sector collapses of the database. And it's less the the plan assignments more through the. The monthly contribution please. Okay so here's the premium plans relative has got a question from Absented rye. Thank you Mr chairman of ladies and gentleman of the wellness checks just wonder how big a part that plays in the S. and if it was more available stay on a local level or we could take this to the folks at their their occupation could that have some impact on on the amount of that we haven't spent actually for the. For the premium and self serve. Have you improve the health of the population you're going to see lower costs. Thank you. Okay I guess the other thing when we're talking about the the efficiency of the plan you know there could be two different plans one shows very efficient one shows not so efficient and that could be just the selection of the group so maybe on average the group's forty years old and you got one plan where the fifty five year olds are selecting it and another plan where the twenty five selecting it so you know the twenty fives are gonna have less claims less cost they're gonna be less risky so they're gonna show really efficient and then the older population that has more claims they're gonna showing higher and so The best we can do you know to show it this way but there is a lot of factors that go into it for make that point. So here's a total employee cost again this is the employee contributions and the out of pocket costs through the plan design for the premium plan as it compares to the non high deductible plans and again somewhere to the side before. Members are paying more out of pocket than the neighboring states for their plans and PSC's. Eighteenth and Stacey planets thirteenth year. As we talked a lot about what the employees paying now gonna flip to what the employer is paying so this is the employer subsidy For the starting with the high deductible plans so the PSE plans subsidies just under three hundred dollars that's on the low and ASC for the high deductible plans it's more in the four hundred range and that's on the high end of the range And this is kind of complicated because the funding that we're showing here is based off the benefit booklet so you have a the total rate if the employee contribution and then the employer rate and that varies by plan and by two year so that's what we're using here in reality the way the plans funded it's based off budgeted positions so really doesn't have anything to do with how people are enrolled in the plan and various tiers so we have done a cross check and the revenue is close but there is a a bit of a disconnect and as we move forward there is some risk on the way the plans funded so if you know all those budgeted positions get caught or more positions get filled there's a lot of different things that could. Costume issues. It is very good questions Senator Hammer. Thank you Mr you just use the phrase cost to administer for her to correct is that right. The cost to administer the plan or did I misunderstand you this is this is what the employer is kicking and for the for the insurance. Do you look at what the actual costs to administer is as far as what you charge by the the handler of the policy like Blue Cross blue shield do you throw that into any consideration and are you just comparing traditional approaches to offering insurance to the populations versus maybe some out of the box approaches to dealing with it. So I mean we're gonna look at a few different things are you talking about the for one of the administrative costs your plan your vendors to administered so will we can definitely benchmark that there's nothing that jumps out right now that says that you're administered costs or any lower higher than anybody else I think did minister programs you know you're competitive with everybody else so we just like I said we just got the details for all that they were going through it in the early last week the other companies using this or other alternatives you should be looking at our ACO model out there should we be looking at me as someone the partnership with universities or things like that and we have we will be looking at that okay all right I just but you're going to consider cost to administer as part of the overall cost of the plan and segregated out that's correct it'll separated out by the medical plan in the pharmacy plan separately it's okay to different kind of programs going on in different ministries expenses for both are right I just a cost because to administer the plan is generally included in the rates that we're using to compare here so that's a component of these total costs in the program that we're showing today but we haven't broken out specifically in the comparison but you have the ability to do that yeah okay all right thank you we do for you for the for the benchmarking states it would be more challenging but for some of the states that we specifically. Work on you know that our clients we could we could get a a list it may be a little different than the less the six states be provided but all the states we work on we could hold a SO fees for that compare. And that's one thing that we're talking about here is a little different than what you're talking about this is really like how is the state funding the program so what's the employer costs in general and and yes reflects the total cost of the program but this is how much money are you putting in and I think that it brought up anywhere using the premium rates that are in the booklet you know like the employer funding rate for single family rate different plant costs all that kind of stuff but that's really not exactly Fund at rates me funded by year your fourth fifty whatever the exact number is times your budget head count and the risk is that Patrick was saying is if you know if you're budgeting for fifty times projected head count and all of a sudden you realize these were not really fill those positions let's cut you know five thousand positions off that are your funding so that means that you're going to four fifty for the full budget if you cut that a certain percentage off the four fifty is gonna need to go up to five hundred or five and a quarter whatever that relationship is so that's all the stuff they were just look at because we just call the financials but that's definitely a risk of the program you know that whole thing you know as you as you pledges that targeted headcount that's total dollar number out there there used to. The fund a lower number of people in the plan so if all the sudden you pick up those extra ten thousand people your fund in the same amount of money. But you got a lot more claims so that's you know that's a risk. And even even as if there's migration to family contracts you have more members are still get enough for fifty per month but you may have five people that you're covering instead of one so and as there's really no finding the the finding it spread to the retiree programs but it's not based on their Roman so as we migrate people to retiree plans or select less active budgeted positions that all can play a part in this as well so. But again we're we're we're going off of you know the benefit booklet numbers and it's pretty close to to the revenue that's coming through the planned so I think it's it's good for what we're doing today So again on the high deductible plans S. the a little bit higher than the Norman PSE is lagging a bit behind when we switch to the premium plan so this is where the bulk of the membership is especially for the SEP plan you can see that four four hundred and change is definitely on the lower and so other plans are getting more funding from from the state that's what what this indicates. I think you guys have had some benchmarking done before and this aligns with what you seen in the past. Your questions Senator Hickey. And I want I want to make sure that I fully under understand this bees and I think you just alluded to it you said that you you've just got that information as you know Arkansas. Although those positions are unfilled we are funding that benefit. Or what you telling me did you take that into account as far as this as a sheet that you've given us are you not taking that into account yet yes so. You just you just looked at a at a position and what and what we were actually funding for that position whether it was field run field is that correct so we did it that way right so that's the actual funding okay so we looked at it that way and then we also look at your enrollment by planning by tears a whole different. Methodology in theory we're hoping that they would be close and they are so So the way we we use that it's often the benefit books I don't know how familiar you are with You know the total expense and then there's an employee contribution and the difference is really that stating plan contribution and that varies by plan by tier so for example on the premium plan employee plus family the state is kicking and one thousand forty three dollars and thirty seven cents per month. In reality we know that the findings come from somewhere else it's just going spread that way so we do is we look at the way the findings really coming in verses if we everyone of the enrollment by plan and they're fairly close it is conceptually we're looking at where you know you're you're funny at a certain level rate the for budget had and then in general you guys take that money and spread the cost over all the different plans in two years right to be you know give the families more money singles a little less and that helps determine how much you want the member to contribute all that stuff going on we recognize that yeah it's the four fifty times this equates to the weighted average a year Roman and those are close I guess we said as of all of a sudden you that changed this part doesn't change so if you're if you also in the four fifty times had became for fifty times a lot lower Hutt that one match up over here anymore so for right now it matches but we're saying that the risk is if you do all the sudden change that budget head count and the funding changes that messes up the sure the relationship okay thank you Sir consents not just a drop in head count that would create a rescue could be more more participants acts elect the program relative to those that are there currently waving or there's a shift from single coverage and one woman and single coverage for family coverage as Patrick mentioned so This Is multiple risks associated with it it's it's sort of a budget positions and then the enrollment mix relative to the to the active actually fill positions that you have to have a place to and we're familiar with that and the way you and you do it there's other states that do it separately it's just it's you know it's a definite risk and you know especially on the retirees thank you as you get more more people retiring me that same four fifty I believe is funding your retiree side too so that's another thing you know if you get a lot of retirees that retire and then you re fill those positions with any fun at the same money I mean you're not making up the extra people right I mean so you got more people in the program with the same level of funding so I it's also the first our look at because we're getting that data and that's you know. Yeah like I mentioned I mean everyone there states that the fun of that way I guess more common method is the the funding comes from the people that are actually enrolled in the plan and the various tiers so you know what's shown in the benefit book that's actually getting kicked in that those specific dollar amounts works a little bit different here. But I guess for that Now says we're doing you can assume that the money that you're funding is really spread proportionally like the shows so it kind of shows how you're comparing to other states based on security plan all that kind of stuff. Let me just add we had numbers presented in personnel yesterday. Is that something we could get to you. That would be helpful Joe actually gave it to us before okay sat down so yeah it looks like there's thirty five thousand budgeted positions and twenty five thousand are filled. So yeah so for example say you what we're talking about before sale this unease the you realize we're not really for almost ten thousand positions right and there's really not plant that's let's just cut it you know we're gonna go from thirty five to twenty five well from a budgeting perspective I mean you're killing your funding for this plan rate and you're going from whatever that reduction is percentage wise you really funding that much less in your program that's what I was saying like if you take that away that doesn't balance anymore these funding number so you would create a real funding problem for the plan that you know there's different ways you fund it but I mean I just you know you're recognized that as you make these changes which I'm sure you do I mean it flows right through into the funding for the program. Thank. Because of these these next two tables are very similar to what we should before so before showing that just the dollar amount in terms of employer subsidy this is now on a percentage basis of the total cost similar. Similar ranking between the plans the PSC again as is on the lower and the S. C. for the high deductible plans or more in the middle a little bit on the higher and and then we flip to the premium plans just just like before their more towards the bottom so. For example you know sixty pairs were coming in with almost the sixty percent employer subsidy So all the costs that are flowing through the planned employers picking up sixty the employees except the other forty. Looks like the average is more around seventy. Okay so that's the end of the analysis and just go through some key takeaways in summary again you know we think the plans the premium basic and classic have a good spread so in terms actuarial value got eighty five percent seventy percent seventy two percent that's what we like to see in terms of plan design so nice variety there you also have a copay option through the premium plan that's a little richer your classic and basic is a qualified high deductible plans so that allows members to utilize tax free contributions The benefit AV's that was a that was the first analysis we did those are right in line you minus the basic plan that's more that catastrophic coverage that's. that's that you know someone intentionally there but your classic and your premium plans where it must your membership resides your plan values are in line with your neighboring states so I guess big picture we don't see a real issue with the designs that the design strategy that the program is put in place. And then from an efficiency standpoint you know we're gonna dig more into it but Pretty close to to the average there and you know it varies by plan by group. But the biggest I think the biggest difference between the the state plan and the benchmarking plans are really the contribution side of the equation so as we showed the employees are picking up more in terms of total cost not just through their paycheck but through out of pocket costs when they use the insurance and then on the flip side the employer funding is a little bit less than what we see and and neighboring states. I mean I guess that slide right before this pretty much summarizes that rate your. In that efficiency slide age twenty three I guess. I mean I think this light is you know. I mean it's a funding decision and you know in general says that you're a lot less near neighboring states if we put the the national bench marking their it would be towards the end of this so national that markup database they would both be up at the higher end of the so. You know I mean this is not a great story to say or funding you know. You know when the lowest of our neighboring states. So that the thanks to take away the other take away is you know obviously not having a PPO plan but you know that may be by design okay you might have a big HMO network that covers it so the PPO option might not be necessary as as an out of network components so that may not be a problem that's what we're looking at Contributions are reasonable I mean I think having the difference on the premium spread for wellness a couple states have the It's it's probably got less common over time you know it it's attended been pulled out of the premium differential but that is something we're looking at I think I don't really have any other comments and that's a mass. The only I'd say is that most of all the charts that that Patrick went through in the appendix we have broken out for your your family plans as well so it's a similar story of what we saw on the on the single single plan side contributions are a bit higher so so those numbers you. What we saw for a single. The question presented Dotson. Thank you Mr just the overall impression. From your entire presentation which thank you this is been excellent is that PPO plans are much more problem than HMO plans can you. Can you kind of give maybe your expert opinion on why that might be what the the. Basic differences are between them and why a hundred percent of large private sector employees offer them were only thirty two percent do if I read this correctly. Milstar now let others chime in but I mean over time if you go back you know ten fifteen years there was a big question of the HMO market place and used to be very tight networks you know and and a lot of exclusions over time the HMO network almost merged into the PPO networks say there's less value in that and and you really don't have the huge medical management component that they were expecting in the two months and then used to be the H. Moser cheaper and over time they became more expensive because the benefit value is higher so I think over time it's changed the P. PO's and then now the networks are bigger bigger bigger so that the tight networks definitely goes in cycles so I mean. The the old age most become E. PO's become I mean there's new names for everything I would have I would also say it depends on the type on how much coverage your plan has so. You know if you if Blue Cross has ninety eight percent of the providers in the state maybe even on the border in the states so HMO has no out of network benefit you pay more to go out of network. PPO has a lesser benefit out of network but does give you an option to go out of network okay if your plan covers the majority of the providers in the state that is less of an issue. Okay at ten understand the difference between the two yes are you going to be looking at with your recommendation as we get toward the end this whether or not it might be beneficial for us to convert to a PPO type plan verses an HMO. Yeah I think all of it is that is part of the function you know I mean it may be. It typically when you do the HMO the PPO movement a lot of times there's not much out of network rates that's kinda like give people the option rate if they have to and financially does really hurt the plants so it's kind of like people to so why have that closed off HMO unless there's a significant network difference so we don't know yet if you know maybe the the blues here have a significant network difference for their HMO network they're using and that's something we're talking about now the different networks and you know what's. This is the minuses of all thank. I would also say. You know if you look at employers they may be more geographically diverse across the country you know in different areas so your state employees are probably more localized in this region where your teachers are statewide in every single county so we can take a look at those those things to. Representative right you're recognized. Thank you. Thank you Mr chairman I think we touched on is just a little bit but question for you let's just say that you had one year. In the future coming on thousand last employees. Okay. And of those employees you know you're gonna have a track record of those folks House situations overall of what they actually used as far as the system is concerned as far as sales calls. If you drop that amount of actual employees from last year to this year or in the future is there anyway you can go in there and check to see a you know that the overall picture should go down because you're losing employees you know so the healthcare cost should go down because the police plans but if you actually could check the health care that is being used. By those folks that are moving off the system could that actually have a part to play and how much the premium would pay overall. Into that yeah so thank you said aggregate claims would drop so say you had twenty thousand employees if a thousand drop in general that's a five percent drop their we'd expect but I think your question is more would be more like a seven percent drop or a three percent drop based off of the actual claims experience for the people that that that we're losing right so if they're high utilize there's that savings maybe seven percent said a five percent Yeah I mean a lot of times what we'll do is as well look at the age sex mix of the group so we'll look at we're trying to normalize the claims all the time so if we realized those thousand people were much older and riskier than we can make a demographic adjustment project no lower claims per person going forward we also look at large claims so if we had a good percentage of people or a few people out about a thousand that had claims over a million dollars and had severe conditions we were normalized for that as well. There's a couple things as you're really looking at we do know exactly what they had and claims right so we know if these people left we have the claims experience you guys have the claims experience in on much music's backdrop the following year traditionally what you end up seeing is people that leave the plan are usually lower cost users in general and they're they're getting either benefits for their spouse or some other way where they can get it cheaper possibly in the exchanges while so. On the other side you're still Fund in the same amount rate so in general as people leave that helps fund balances got less people they're paying claims or even if it's a lower amount because you're still finding that budget appropriation position. I mean the other thing is a small percent of your population is typically a large percent of your claims and on the medical side a high cost Klieman one year wouldn't indicate necessarily high cost claimant in the following year some of the some of the biggest high cost claims are going to be pretty premature babies which wouldn't be the case the next year cancer that's on the medical side on the pharmacy side you have a little more continuity because of specialty drugs specialty drugs are so expensive in the coming through the pipeline all the time and becoming more and more percent of total costs those people that are on the specialty drugs with chronic conditions. Tend to continue on them unless as a cancer patient United cancer drugs are also very high so just because you you just because a person has high claims in one year doesn't necessarily mean they do in the next year so it's not that straight for. Senator Hammer. Thank you I'm wondering in the other states that we have been compared to that reflection thing in your report we're we pretty much an apple to apple comparisons such as our state employees or separate population from our teachers or did any of the other stage that you utilize for this report maybe have the group's combined together or maybe they even had other groups combined in you know such as minister pal municipal league or association counties other populations or were they all segregated like cars. I think was a wide range you know we just took the neighboring states you know summer like Texas you know that's all teachers that we with that and then some you know there's a planned and so it really all over the place did you find a benefit. In the states that had a greater pool even though they were made up of individual components like the teachers in the state employees in the Municipal League did you find that they had any greater advantage in lowering costs by having to a greater pool of people to blend out cost over. I yeah I don't think we can make that conclusion unites if we look at everything on on an average right so it's all blended together and to be Frank some of the groups were not. We know it's the state health plan but we're not sure like all the different components of how it's all made up some of the ones we work on like taxes you're cursing can speak to the the TRS plan. You know about how they are in yes it each state it. Each state has different ways that they're set up in terms of eligibility some have state versus teachers separately some have employees versus retirees separately some include the University systems so for instance some I'm looking at Texas we looked at the teacher retirement system bear employee retirement system is is separate not includes both actives and retirees on both of those. Mississippi includes all state plans and teachers. I think Tennessee does as well. I think Missouri does as well not sure about at the home so they're all different but we don't see a big differential in cost when we look at those separately just from a just from the standpoint of risk well sometimes we have you know they might have different benefit design so that can that can play into it as well so in your overall recommendation to bring back to this will you have a look at the possibility of combining the pools together in order to lower the cost to all the participants even if it means going against traditional approaches that we maybe have used in you could use other states or your own data to be able to say if you do the if you combine these together overall cost is going to be lower by combining the populations is that going to be in your consideration yeah that was that was a request that was made so that's yeah that's something on our to do list to look at combining the public schools and one thing to think about it you need to do you don't pull the finances they run separately but in general you're pulling your purchasing clout so you got that advantage you're you're you're procuring things together you get the same thunder seating in the same financial deals for higher administering your expenses for a program. So I think you got that positive so so like the run totally separate and one figures one one Parkers and others I think in general if you can if you can use your purchasing clout to get the best possible deal you know that'll help just pulled the funding other I'm not sure if I mean if everything else is running through the same vendors in the same cost structure you're not gaining anything other than pulling resources to cross subsidize so I'm not we will look at it but you know I think the big is that you're you're purchasing together and you're got the cloud of your the combined group okay because changes difficult people except change better if they know it's going to lower their costs and put more money back in your pocket so it just it's just taking a look at the premiums and we would be what we need to claim submitted to our underwriting to determine whether or not it would lower overall costs but there is a fairly large disparity in the relative premiums between the public school employees in the state employees so and it would be sort of some some winners and losers and that combination relative to the program I would imagine from the state employee's side likely seeing an increase in costs and public public school employees maybe seeing a decrease their so how that shakes out to the overall funding to the program we have to see an end to the underwriting do that but you know there there would be some some movement both ways in order to sort of get to that are combined yes Sir Mr target in the same total value so I mean if you want to find a little more money you can make it so that you know most people are women but we will look at the. Okay thank you. Representative Shepherd. You Mr chairman. I have a question here about the the characterization of these plans and and you may have touched on this I came in a little late it just for for my understanding. So as we look at the at what other states are doing and we've identified that that I guess all are offering PPO and HDHP plans and then of course the other category be an HMO plan but particularly on the high deductible plans. Does a high deductible plan not fall into the category of an HMO or PPO is it something completely different and and this may be just from my lack of of. Good knowledge of health insurance but could you talk to me a little bit about what the high deductible plan looks like and if that's if that's completely separate does it just mean that you're paying for a high deductible plan you can essentially go anywhere anywhere you want there's no network there's no preferred providers I'd like some clarity on the disk the distinction between those plans. I don't think I've ever seen a high deductible plans and HMO I think it it it doesn't by statute require an out of network. Check. But I'll have to check that but I don't think I've ever seen a high deductible health plan that's an HMO so a close network meaning you have no out of network benefit. so so from your understanding with with a high deductible plan essentially be a form of a PPO. The sexually but one of the when the requirements of a high deductible plan is a need to have a certain deductible threshold with no first dollar coverage before that where as a PPO may have a high deductible but you have a copay if you go to see a physician first calendar right so there is there's a minimum deductible level that needs to apply and and a high deductible health plan in order to be considered a true high deductible health plans there is a distinction between a PPO and HDHP in that regard from a legal perspective in order to. To be able to be combined with the health savings account which is really the distinction between okay to thank you. But just to clarify I mean a high deductible plan will have a network in place where you could get discounts when used in network so if you go to blues provider you have discounted the it's just that you're paying on representative that fee until you hit your deductible level when I guess that touches on really the basis for my question is when when you look at a PPO or HMO and maybe it's just by by way of the title the title focuses on. Whether it's a. Preferred provider or health maintenance organization that focuses on delivery of services were as a high deductible the title is focused more on the financial arrangements related to it so I just that's helpful to get some clarity because it seem like was I was looking at the. That well we have three categories here to me it looks like kind of apples to oranges but that's helpful that that it's more akin to a PPO yeah I would even say the HMO that you offer is is it's not like more of the staff model style HMO is with tight networks it's it's basically a PPO network with just no out of network coverage that's that's offered to participants so it's it's it's more similar probably to PPO style plan and that's why we sort of lumped together HMO and PPO together as non HDHP plans in the in the comparison okay thank you and just. And there are some plans that have high deductibles that are a qualified high deductible health plan so you're correct that the kind of apples and oranges and the fact that that is defined by that because is defined by the IRS and what and what qualifies you to put money into an HSA HSA account. Thank you and our goal was to divvy up the plans based off the design you know because a lot of times those follow suit with the premiums and contributions. More of a design difference than a network. Representative of. Thank you Mr So just just for. In your wide breadth of knowledge there are no it's it's prohibited to have an HSA with a PPO or an HMO there there aren't any. Hybrids out there it that's a that's a completely federally defined. Thank. It yeah that's correct you have to I mean there's a requirement by law how you can have an HSA and that's not something we can change in any at the state level at all okay I mean the what what what people do in the past and instead of having an HSA some states that don't want to meet that requirement will have what's called an H. R. A.. So the differences an HSA you actually put money into somebody's account right in the access to the money NHRA it's almost like a fan account you know you can manage it there's theoretically so much money going into account that the member can use but the state hands the money holds the money so it's really not technically the member and the member can come contribute to it so that's really a big difference okay thank you. But but you could do an interview I mean it's something that you could put across all your plants you want to do that and and some do do that but it it's administratively really complicated and it's almost like not appreciated because a member leave they don't get that money so it's. It's almost like you know get the value of it. So I think that's pretty much it for the bench marking it if there's any other questions we could it's not okay. Well it isn't isn't so. If you want to cover before we uh it up to what workers and be talking about just some of the strategies that we're seeing from a retiree perspective this is across all states so we we just died and some some analysis and research on on what states are doing relative to to retire you plans there are some that that offer no retiree medical to their participants. Can I clarify that we're talking about Medicare Medicare eligible participants yes so this is post sixty five participants or or those that are otherwise Medicare eligible under sixty five so the the predominant strategy that we're seeing for states across the country on a medicals on the medical side of Medicare coverage is Medicare advantage that seventeen states exclusively offer Medicare advantage and and others are doing that alongside a Medicare route so it over thirty in total that are offering Medicare advantage in some form to to their Medicare retirees Arkansas is currently offering a Medicare route meaning that they they provide traditional coverage that coordinates with Medicare and offset the out of pocket costs for Medicare coverage for participants so as. Person to be talking in detail what it means to to be a Medicare advantage plan and and what what some of the benefits of that may be but I just want to give you a sense of what what other states are doing as it relates that. And the other component on the Medicare side relates to prescription drugs and and what states are doing their the the the the first full year the the largest percentages states are offering employer group waiver plan or a Medicare advantage P. P. or an MA PD that's just a prescription drug plan that's tied in with the Medicare advantage program it again personally going through in in great detail on in terms of what that means it from from Arkansas is perspective that public school employees do not receive prescription drug coverage others there seven states in total that do that and then for the the state employees or the state employee retirees there there the state is still coordinating with with collecting their retiree drug subsidy that's one of two states in in a country that that continues to do that and and there is a number of reasons why many states have moved to a web or M. A. P. P. finds and as I said personal go throughout and in pretty good detail in an accession. Okay this. I'm not sure is this is the second deck loaded on here as well. I guess before we move on is there any other questions on the bench marking the whole appendixes on the similar story with the family so we didn't want to you know beat the death I mean the if you want to look through with it differentials you can see all those in the back and. So we're at. This. You can make. Just just operate without yeah. Okay. Okay here we everybody good to continue on. You will just pull that microphone closer. Is this I don't want to pull pull it out is it okay to okay. The court okay. There we go can you hear me now. All right so. Medicare advantage and part D.. Employer group waiver plans that's what we're gonna talk about now from Matt just gave you a couple of stats the majority of states are doing Medicare and part D. plans with an employer group waiver plan so. We are going to hear here are the Medicare ABC's so Medicare has four parts part a covers inpatient hospital services. That is funded through tax. taxes and we talk about the the part a trust fund we hear a lot. Part B.. Covers physician services an out patient care. That is seventy five percent funded through general revenues and twenty five percent is funded through a part B. premium that everyone has to pay on a monthly basis. Part C. is Medicare advantage. And part D. is outpatient prescription drugs. So Medicare is administered by the centers for Medicare and Medicaid services CMS which we'll talk about as we go through. And they contract with administrators. For the fee for service parts a and B. so a and B. is original Medicare. People are going to the doctor they go into the hospital a claim comes in speed for service those claims get paid. Part C. Medicare advantage is goes to private health plans and we'll talk about that important the other prescription drug plans again as a private health plans. Other. Okay. So. Current coverage for Medicare retirees that you have. For. ATSC NTSC. Are doing the original Medicare and then a coordination of benefits through your plan. the coordination helps pick up deductibles co insurance other costs that aren't covered by original Medicare. So original Medicare covers they have a little bit of a complicated formula on the hospital services part a which is a fifteen hundred dollar. Deductible each time they go in certain amount per days. On part B. there's a part be deductible for the other services and then it pays eighty percent so what's not picked up by Medicare comes over to the plan and then your plan is picking up some of these additional pieces that are picked up. There are three different types of coordination that can be done with them full coordination of benefits exclusion and carve out and this just refers to what's the claim comes in from Medicare how do you. How do you put your benefits toward that full coordination of benefits is the most expensive so this is where you look at it and you pay the difference between the total eligible charges in the Medicare reimbursement amount and make them whole. Or the what or the amount that you would have paid in the absence of Medicare if that's less. So on the next page. If we look at the difference between group Medicare advantage versus original Medicare on the left side is the traditional approach that we were to that I was just talking about we're Medicare pays primary. And then you pay the supplement so there's no coordination of care here on the right side we're looking at how does a group Medicare advantage PPO work. So now you have coordination where there's one plan is all under a single plan and then you have. Management of that plan so if you think about it the left side what's happening now is on managed but the right side has management to it so all of your non Medicare plans have managed care so people are used to that and then they go into a Medicare advantage plan and there's no management there are no health for the members. So what do we mean by management that you have a coordinated care and support that you have in home appointments if if necessary the chap provider collaboration and incentives that people are looking to see if you've got your preventive visits you're getting proactive closure in gaps in care for the members and they even have incentives for them to go to the doctor and do their preventive care. for their health and wellness. So. Why is a group Medicare advantage more cost effective because if you think about what I just said if you look at the if the graph on the left that's the Medicare plus the supplemental plan we're Medicare is paying eighty percent of the cost eighty to eighty five. The plan sponsors paying fifteen to twenty percent of the cost. So. Is not. It's not cost effective to invest in managing these because you're spending money to manage to reduce costs mainly for Medicare. But if you look at the right side you go into a group Medicare advantage plan now the plan has the full liability of the claims so there's a cost incentive to manage claims make care more efficient help people get through the system and reduce the costs of the this cost of the entire plan becomes less. Any questions so far. And that fifteen to twenty percent the the plan and is fifteen to twenty percent of a much bigger number so you know that's not insignificant the amount I mean the the the whole bar is bigger than your active plan so when you look at that slice the it's a good amount of money so if you can manage the whole big part helps reduce your little slice I think that's the overall odds that's correct I mean we were looking at the bench marking and we're talking about an active plan that's may be in the range of four five hundred dollars per member per month when we get to a Medicare population we're talking about medical claims alone and that are more in the nine hundred dollars to a thousand dollars per member per month. So so Medicare advantage. So Medicare advantage plan like I said before is offered by private carriers in that combines all the benefits into one plan so has it covers part a and B. and is required to cover at least as much AS Medicare does and then it pulls those rat benefits all into one plan. Now pharmacy which we're gonna talk about later part D. can be included combined into the same plan with the same Kerrier or it can be separate. And the way it works is that the carrier The the private Kerrier receives dollars from Medicare to manage those claims and it's their full risk. So they're getting payments from CMS based on two things one is a benchmark rate which is a fixed monthly payment based on that members county of residence and then also there's risk adjustments for each member separately so this is a a factor that gets applied to that benchmark rate that reflects the illness a burden for each member so if you have more claims you're going to get paid more for that member if you have less risk you get paid less for that member. Then the fully insured premiums that a plan sponsor pays is just you can add on you can have that plea and cover more than Medicare pays so whatever your your premium is is whatever the full cost is less what they're getting FOR Medicare. And then the met in may carrier will manage everything the claims risk adjustment clinical programs care management customer service all of those things. So. So Medicare advantage or Medicare managed plans have been around for a long time and there's been a lot of discussion over the years of you know is this going away so I wanted to walk through he dates of what's happened in in Medicare advantage over time so prior to nineteen ninety seven there were Medicare managed plans they didn't have the risk adjustments to them they had some issues with that program people are allowed to come in and out of the program that didn't work in nineteen ninety seven the Medicare plus choice was introduced in the balanced budget act and change some of those things they started looking made they actually got the wrist model started in about two thousand is still didn't work really well and in two thousand six the Medicare modernization act came in the changed Medicare plus choice to Medicare advantage and change the funding of those plans we have the risk models in place and at the same time. It It put party into place so prior to the Medicare modernization act there was no coverage for Medicare pharmacy but this change all of this and also increase the types of employer sponsored plans that could contract and coordinate so that was where employer group waiver plans came into play and a lot of times when people talk about lips they're thinking about a pharmacy plan but this really applies to me to medical and pharmacy and what the waivers did was. Medicare advantage was was set up for individuals so this put all kinds of waivers in place to allow groups to come in. In two thousand eleven I think before before two thousand eleven there was a lot of talk that Medicare advantage plans are being paid more than fee for service why are they getting more money. With A. C. A. came into place. In two thousand eleven they changed the payments again and they cut the rates that they were paying them but they also came out with the star rating system so if you meet these quality levels you're going to get paid more. And they also added the health insurer fee. In two thousand seventeen that they change the group betting and the phase that in over three years was which was yet another rip the bandaid and in two thousand nineteen they repealed the health insurer fee. So if you look at the next page. The total enrollment you can kind of see what happens is as we went through this timeline. So. Two thousand six is when everything changed with Medicare modernization act and that's when you started to see enrollment growth. So as of twenty twenty thirty percent thirty six percent of all Medicare beneficiaries are are are in a Medicare advantage plan and that includes individual and group plans. So the next slide shows Medicare advantage penetration by state so when we look at that enrollment growth you can see it is all over the country some places have been more aggressive with this than others is showing Arkansas is being between twenty one and thirty percent Medicare advantage throughout the state. And if you look at the next slide this just shows enrollment by carrier so the majority of Medicare advantage plans are with four plans this is a this is a highly technical kind of plan and they have to After a contract with CMS United healthcare humana. That BlueCross BlueShield of think that's mostly Blue Cross blue shield of Michigan and then CVS health which is also at nine. Or the majority of the the vendors in the space. So what is group Medicare advantage and I want to compare a little bit to an individual Medicare advantage plan versus a group Medicare advantage PPO. Geographically individual Medicare advantage plans are typically H. demos with tight networks where group Medicare advantage is a PPO and it can serve every single county in the country. plan types we just talked about that primarily an HMO a group Medicare advantage is going to be a and when we say non differential PPO that means you have same benefits in an out of network and we'll talk a little bit about why you're able to do that. Provider access is an individual is contracted providers only we're in a group Medicare advantage is any willing Medicare provider that will accept the plan. in the financial present value position individual market is typically higher retiree out of pocket costs but for a group Medicare advantage you can make it whatever plan design you want. And sustainability we talked about the balanced budget act of nineteen ninety eight where they did have some challenges but since then we've had clear stability and significant plan sponsor savings and because the the jump in there I mean I I think it's an important point that to go the differential differential between individual programs and and group programs because effectively what you can do from a group based program is is match the level of of network penetration in terms of doctors that would that participants can go to see and and the level of benefits that's that's offered to retirees can be generally match to what what's currently being provided to the Arkansas retirees on the individual side that's not the case these plans are much leaner tighter networks then what can be available through a Medicare. So when we talk about that. Non differential PPO is also known as a passive PPO. So what happens here is retirees pay the same cost share for services whether they're in network or out of network. The reason they can do that it was different in the commercial population is. In a commercial population you have contracts with those providers in network in the out of network they can charge whatever they want. But here carriers pay that in network providers according to their contracts and then they pay out of network providers according to the Medicare fee schedule the contracts are going to be pretty close to the Medicare fee schedule if not the Medicare fee schedule so is not a big differential in what you're paying the members of the providers. And then all Medicare accepting providers are provided with with tools from the Kerrier so that they have all the resources to submit the claims directly and then they don't have to go through to adjudication process sees to get their money goes to one Kerrier they get paid a lot faster on the provider side and then if the provider will not build the carrier if they happen to find one then a member can go ahead and pay and get reimbursed by the carrier and then bring it to the Kerry let the carrier have that conversation to bring them into network. There's no PCP selection required there's no referrals required to see a specialist and then down in the bottom in this blue box this is what's in the employer group waiver that CMS allows employer group plans to provide coverage to members anywhere in the country as long as they meet the network adequacy requirement for at least fifty one percent of the beneficiaries so that's the waiver that allows them to do this. Got a question for representative right you should. Thank you thank you Mr chairman well you know the folks that are here in the system here to capital and also our our school teachers that actually continue to just stay in the system from sixty five years and up. Just wonder what percentage do we actually pay on time you know like if the break down is there for say ten thousand dollars for certain Medicare what percentage does our plan Hey here and what percentage does Medicare pay ma'am overall on the break down can you give us something like that. Yes so Medicare's gonna pay somewhere between. AT the eighty five percent. And then you're picking up somewhere between the remainder of that so fifteen to twenty. And and what we'll get more to the numbers later but the because it's on manage that piece that you're picking up this somewhere in the realm of two hundred dollars per member per month. And if you go into a Medicare advantage plan I would easily say you could cut that in half and and probably lower. Without without beneficiaries losing anything. And there's also the member the retiree contribution they have to pay to get that supplemental plants so that's you know I guess our overall thought is if you could bring down the whole cost you could potentially bring down the retiree contribution as well right so that's a big component of the whole thing we're trying to do. The other piece of that though is if you bring down the whole cost remember that's also getting funded out of that four hundred fifty dollars so could bring down costs for the active side as well I mean you can figure out how you'd want to use those savings but they're definitely savings available. And again without without hurting anybody's benefits. So. So the next page is is kind of looking at the benefits to members so it's a simpler experience where there's no coordination of benefits a single ID card is all under one plan there's a single call center they get it an ex explanation of benefits from one place on a quick want design so it can be exactly the equivalent benefit design that you have today. you can have it you can even if you had a percentage we can look at claims and and change it to a co pay make it super simple. the passive PPO we talked about so nationally so the thing about retirees is retirees move so you want to have a plan that you know where you have the HMO in the state now and and you may have ninety eight percent coverage that doesn't help someone if they move out of state. so this does it miss near universal provider access I can either a hundred percent of hospitals accept Medicare and probably ninety six percent of positions and. improved health and wellness so that wellness programs clinical programs help coordinate care help to help to coordinate your discharges like when you're in the hospital where you're going next you go into acute inpatient rehab or you go into a skilled nursing facility do you need home help what do you need. and then additional benefits so Medicare continues to add on additional benefits for members and and in some cases this is kind of replacing the long term care benefit that used to be necessary so meal delivery when people are discharged non emergent transportation wellness incentives fitness benefits hearing and then it vision coverage and we've seen that that's in the new bill and in. Federally to potentially cover hearing vision dental. So if we we look at this next page that shows some of these extra benefits. vision benefits telehealth dental fitness hearing aids over the counter benefits meal transportation and home support safety. And and these next two slides I showed this one in twenty twenty where you see seventy nine percent we're covering eyeglasses seventy seven seventy four seventy four seventy two if you look at the next page. These are the benefits and twenty twenty one and you see they've gone up ninety eight ninety six ninety two CMS's very innovative in trying to cover more benefits for members of these ones that were typically covered under traditional Medicare. So the next page shows we we look before the growth in enrollment for all Medicare advantage which was individual and group this one shows just for group. And how it's grown over time so it's a smaller percentage of the overall but one in five Medicare advantage enrollees or an employer group plan birth versus the total. The next page shows state health plans a retirement system offering Medicare advantage and Matt talked about that thirty offering so these are the plans that are offering. And I thought this a map kind of. Look a lot like razorback colors. So I think on that map it's interesting to look at who offers that who doesn't rating everybody around you is having the plan and if you look at the ones that aren't having it there's reasons for it I mean some of them don't cover a retiree medical benefits like Mississippi or Mississippi covers medical but not drive. And Tennessee has a stipulated amount in their legislation to that they're just paying tax dollars so they have a site plan but other than that I mean everybody's got it and you know I almost think if you look at the number that you said earlier thirty states when you look at this map it's really this proportional because like that Midwest areas the part that really that isn't doing it that much but all around you is doing it and uh earlier on Kristin had the penetration percentage means a really good penetration in the state I mean you're consistent with all the states around you so it's not that is not the retirees are familiar with the they are familiar with it so I think this is a positive that you know it is something that you know when in the benchmark comparison you know most people are doing it and there's a reason for which personal get into that as we go through right. we talked about the fact that Medicare modernization act came in in two thousand six in those years I was working for a company that actually did the pricing and then I moved over to the employer side and put the first state health plan in in Georgia which is where I'm from in two thousand eight and now they're thirty states there. so then the next page just shows group Medicare advantage PPO differentiators we talked a little bit about this but just kind of go back through them really quantifiable savings and no financial risk within all insured fully fully and all inclusive fully insured rates for the plan maintain current benefit levels nationwide provider access simplified administration. All Medicare retirees can roll regardless of where they live it can be the same design the same pricing for everybody across the country. And just the ability to manage long term risk improvement in care and you can auto enroll them in a group plan if you want to. So. I'm gonna go through on this some premium pricing components. Because I want you to understand me. I want to understand why and how this works why is it lower cost so there really three levers that determine group premium sustainability claims costs we talked about how you how you have all these clinical programs so have that in blue their claims cost so if you look at the pricing of claims cost let's administrative is the total cost of your program. From the funding side we get CMS revenue which is the benchmark times the risk for that we talked about and then employer premium is the difference between the two. So I guess one thing to note is that these are your numbers I mean you guys are actually closer to two hundred dollars and that premium product but this is for illustrative purposes we haven't got to that point yet. Yeah I want to show how leverage a bull it is would you manage claims or when you work three risk adjustments so this is just a starting point so we talked about clinical programs they reduce claim costs the annual wellness visits home visit programs here and diabetes management health and wellness so if you look at page twenty two. Here's how. Hello leveraged reducing claims cost is on the group premium so on the left you have claims cost on manage that that's the one that I just showed you. If you reduce claim costs by two percent. So the only thing that changes is that original starting point nine hundred dollars goes down to eight hundred eighty two dollars per member per month that reduces your employer premium nineteen percent. The CMS funding hasn't changed. If you reduce claims costs four percent. Now your employer premiums going down twenty three percent. All the way to reducing claims costs eight percent now your your premiums going down forty four percent. And it can be more than that. So the next piece I want to talk about is the risk for. So the way the risk for works is a risk model the CMS uses is based on diagnosis codes if someone doesn't and is based on twelve months of diagnoses codes if someone doesn't go into the doctor they don't get it coded if if they're not in there for your they have nothing in the system so it's really important to make sure everybody seeing the doctor make sure everybody's getting the correct diagnosis codes. This is something that you historically doctors are paid for diagnosis codes doctors are paid for for procedure codes so this is a plan really in scenting doctors through payment. To make sure they get the correct diagnosis codes on the claims so. These plans have armies of people looking at looking at risk adjustments so encouraging members to go to the doctor they have benefit designs that encourage them they have gift card incentives that encourage them and they love the gift card incentives they have home visit programs where they can go into the homes and not only C. you know when you go into someone's home and and this would be a provider you can see what medications people are on is there interaction between that you can see is there a fall risk in the home you can see do we need to refer them to a different program. And then plans isn't the doctors to record the the patient's diagnosis codes they provider relations a lot of training on coding that online tools they have you to they can they can set up to teach them how to do this and may have contract incentives to make sure they're getting those on there they can also on audit diagnoses codes and look at you know is there are there certain providers that are coding so they can go out and do more education but coding is critical and CMS when they do these builds every year assumes that they're going to be increases each year because these companies are doing that so if you get a company that's not doing it they're falling behind because they're all setting that and the pricing each year. I have a question representative Dotson. Thank you Mr just just while we're on that as far as the coding and that sort of thing does that qualify if someone does like telemedicine type is that the code those an act count as being in the system thank you they do and they they use to not do that and there was lower telehealth as everybody I but I think it was in March of this year that CMS. I'm sorry I don't remember exactly the day I think of the March of last year right when all this happened that they changed it so that they could use coding through a telehealth visit because we got into the situation with that thank you. So so a lot of while we're on that topic a lot of more telehealth now than ever especially for those members. So so similar to what I did looking at the impact on claims costs and the leverage their it has a leverage on increasing risk scores so this is the same starting point on the left that we had before and now we're looking at changing the risk for so if you get those diagnoses codes on the claim and you're getting the getting the risk for appropriately not inappropriately appropriately on the claims then if the risk for increases to percent it change it reduces your premium eighteen percent all the way up same concept if you increase that risk or eight percent it reduces your claim seventy two percent I have once a state a neighbor of a close. State of southern state where we put this in we saw the risk or increase fourteen percent. So this is really doable this is not a stretch on and it's about tracking the claims it's not like they're making up claims and they're really just making sure people are code and all the diagnosis when they see somebody so that's the major component of it and and and you're looking at these two pieces individually but you know there's no reason that the the overall claim costs can't be reduced and the risk or of the population can't be increased as well and and in combination these numbers can get even greater and and that is what happens and again it's going to be a fully insured premium we go out with an R. F. P. and asks for bidding on this we're asking them how much do you expect claims to be reduced how much do you expect this force to be increased and that's what they're going to base their vote on so they're on the hook to do that once they get that and we would absolutely expect these two things to come together. The the last component that is the big lever on this is hi star rating so I was talking about how ACA put in the star rating system and pays based on that so star ratings or scores of quality measures there based on the quality of care hires the higher your star ratings the higher the higher your benchmark so that benchmark The maybe nine hundred fifty dollars I looked at an average for Arkansas nine hundred fifty dollars for this and that's a straight average across all of the counties in the state for twenty twenty two is gonna be nine hundred fifty dollars if you get an additional five percent on that that's a lot of a lot of money this forty five fifty dollars PM PM. Senate to cover these claims and the measures that go into the star ratings are based on staying healthy are you getting your screenings are you getting tests are you getting vaccines is that is the plan encouraging you to have all of this in there are they managing chronic conditions what's the admit what is the member experience with the health plan and the drug plan are there member complaints or there are the members having problems getting services what is the health and drug plan customer service. It patient safety and accuracy of drug pricing so they're definitely listening to the members we're not talking about taking away benefits because it's being managed. So that's the additional piece and you want to plan that has a star rating of at least a four point no because that's for you get the five percent that means they're managing while. That means they're taking care of their members but they're getting paid for that. So. Here's where we see the potential savings for and we say ASC you're removing to Medicare advantage twenty to sixty percent I think you're usually at the sixty percent more toward the sixty percent range so. twenty percent we put in there being conservative because it met you know we won't know until we go out and get some numbers from the carriers but this is the range that we're putting out right now and is based on experience with other clients the transition to in may and when I say other clients that a transistor transitioned in may we've had. Eight ten states that have moved to Medicare advantage. So this is the potential cash savings per year. And then if you look at the next page you also have a liability savings from your okay so here if we take the same twenty to sixty percent per in a savings opportunity it reduces the claims they go into the OPEB thank you projected out over thirty years forever. support so we took an estimate here if we if we said we think. Your post sixty five represents anywhere from forty five to sixty percent of your OPEB liability and then if medical is forty five to fifty percent of that amount then your potential liability savings just comes off your OPEB liability could be between a hundred and four hundred sixty a hundred million four to sixty eight million dollars. So that's a significant number so Yes let's stop here and see if there any questions. An E. you know when you go out with a large state plan and procure this and have a carrier you get a lot of customisation so they would be coming in making sure they have good relations with your providers making sure the networks understand what's going on we make sure if we. We we we might not be running a requirement we do have one question okay representative Crawford you're recognized for a question. Thank you. I'm just learning about all of this before came to this meeting to. My understanding was is that the inmate plan is a pay later plan where the other plans were to pay as you go with the doctor bills and such. I don't have my notes in front of me so I may have that wrong. But I guess my question is it looks to me like with your presentation. Your goal is to get people who are on Medicare to move into this is that correct. That would be the savings opportunity and and I am a fan of Medicare advantage I think it's a really really good program okay my other question would be. on the measures and staying healthy. If the person chooses not to get the shingles vaccine or the number on your vaccine and not talking about the other one. If they choose not to do that then are they going to be penalized in this no very good question there absolutely not all of these programs at their clinical programs they will they will tell you what you're gassing here are they will not require you to do something that you don't want to if they if they identify you they'll have all kinds of clinical programs if they identify you as eligible for program they will reach out let you understand what a program is is completely voluntary as to whether you want to participate or not and that goes for anything yes and and the staying healthy that's going to be more measures to make sure the providers are doing what they need to do to give you those options and and that's where that peace comes from as far as the member is going to be more what's your satisfaction with the plan in terms of all all different types of things are they supporting you are they giving you the information you need what is customer service light all those things but yet the all of those things are voluntary there's nothing somebody's going to force you to do like a like a shingles vaccination okay thank you. Representative dot. Thank you Mr chair Just looking back on your slides here I think. Slide ten shows that Arkansas the twenty one to thirty percent contraction rate for Medicare advantage plans Is that what you're basing these cost estimates under on page twenty six twenty seven. The savings opportunity is it off of that that populations already. Taking advantage of it in Arkansas or is that if a hundred percent of everybody was on the Medicare advantage plan we had full saturation so so those numbers so Medicare advantage plans available in the state which are gonna be there may be some employer plans here but they'll be individual plans here you probably have. At. Double digit number of of Medicare advantage plans in the state available on an individual basis right the prevalent I just wondering as far as what your estimate savings though my estimated savings is if you made a full replacement for all twelve thousand retirees in in in a system and then that's the savings potential probably closer to the sixty percent range maybe more you have any idea what percentage are choosing. That that our ASC employees today on the on the private side. Right is that is that you think that tracks of twenty one to thirty percent. I don't know if you have I mean all of your AS the retirees that are in enrolled in a health plan don't have a Medicare advantage plan currently I don't know if you have members that but but they have a contribution to be in the plan which coordinates with Medicare and and has that rap you might you may have retirees that aren't in the plan who elected to go into an individual Medicare advantage plan I don't know if you do or don't I know just just so I have my brain wrapped around this here if we have currently all the retirees in the state use our our retirement health plan as their Medicaid supplement. The Medicare for the a and B. and then and then basically that's their supplement rather than going out and getting private insurance for so is that. And that this has a correct understanding this zero Graham would place the current set of coverage that you provide to your tires today so this would be the Medicare the the plan offered to a lessee retirees would be this a Medicare advantage plan and would they have any out of pocket to pay for thank. If I'm remembering back years ago when I study this little bit more than a dozen or more at. Looking back I guess I was on the the second reiteration of the of the changes in federal law but you basically gave up your a and B. to get your C. but you still. Paid I mean you're paying for be a small premium so you you you didn't have to pay that premium anymore and that was part of the the savings that you could apply for C. for your deductibles and and other other things so you had a private health insurance plan that was the. The sales pitch to individuals to switch to a Medicare part C. plan at the time What you're saying is. We these retirees are currently paying their Medicaid be premium. Correct would no longer have to pay that they would continue to pay they were continue say that premium for Medicaid park parts a and B. you're just adding. The C. wraparound coverage that. Is not really a Medicare advantage it's it's it's replacing a and B. it's it's a it's a. The enhanced supplement plan. Correct so so I actually had some slides on that month and I took them out so Medicare part a is funded through tax contributions so when you're working right employer has attacked a Medicare tax there the individual has a Medicare tax that goes into the trust fund that pays for part a. Part B. non hospital services including outpatient hospital or funded seventy five percent through general revenues from the federal government and twenty five percent is from that part B. premium that comes out of your social security check that continues now individual but will make a little bit further That's what they're paying today and that's what I'm assuming as we look through this they would continue to pay the difference would be so that's just how do you funded Medicare right in addition to that the members are currently paying a contribution to ASC to have the rap benefit. And the pharmacy benefit. In the over and above well the rat benefit over and above what Medicare a and B. is paying and then plus the pharmacy piece of it okay some currently so in instead of that this Medicare advantage would replace. It it doesn't take away a MBA to instead of a M. B. paying first and then the sub plan paying last. A. M. B. the federal government would pay the private carrier for a and B. and then they are at full risk for those services plus you add on any other services you want. What what you're saying is this this would be a at a C. and the plan. Okay however they would continue to to take out of there so security the payment for B.. Payment for B. would remain the same. Okay the premium the premium for with that remain the same medium for that go back to the feds or would that go to the plan that would still go to the feds as suitable okay thank you but and. The feds so the feds are getting that twenty five percent right of the of part B.. But a hundred percent to cover the claims of it is coming back into the private carrier that will will be used to fund your benefits right at I'm I'm just trying to figure out what a witch buckets what's going and what what exactly we're talking about so I think I've got a pretty clear picture of it now I appreciate a top. Representative Ladyman you're recognized. Thank you Mr well obviously this is very complicated. And I think I'm more confused now than at the beginning but On the private side. If you have traditional Medicaid. And that comes at you so secure you pay benefit you pay a fee thank you talk about part B. that's what that covers and then you can have a supplemental through your private. That you pay it would cover part of that twenty percent or whatever that is So you can choose not come at the private side and I'm I'm wondering how this transitions over to our state plans So. I believe you can switch to a Medicaid advantage plan. Which gets all of this included into one plan and you get the additional benefits of dental and vision and hearing and all that but when I discussed that with an insurance carrier they said there was a cap if you go to Medicaid advantage. A total cap is that true a total cap on benefits or total cap on how much you would have to pay out of pocket no a cap on benefits there's not a cap on benefits there is no total lifetime cap no so there's no difference there nothing Medicaid managed his Medicaid you have to cover a Medicare advantage plan has to cover at least as rich as Medicare and then add on okay all right in the private side you have the option to do Medicare advantage or traditional Medicaid would that be true if we adopted Medicaid advantage what are public employees still have the option to do Medicare advantage and traditional Medicaid. That would be a decision that you would make I mean do you want to most of our plans well if if we go look at. What we had in the benchmark there's a. Seventeen point seventeen state plans. Haven't done full replacement so they only have Medicare advantage thirteen states are doing Medicare advantage and a Medicare route along side each other. And. You're if you want to do that the Medicare plus rap is going to be a lot more expensive than a Medicare advantage plan because of all those things yeah I understand that what I'm trying to the. Answer I'm trying to get here. If we go completely then are employer our state employees don't have the option to stick to stay with traditional. If if you did that yeah what one thing to notice like we're talking about it I mean the group product a Medicare advantage is completely different than the individual product a Medicare advantage so the group product is you can go to any Medicare provider I mean any of them so if you have traditional fee for service and you're going to see your Medicaid person nothing Medicare provided nothing changes same network you'll see the same when you're saying before it may be under the Medicare advantage group platform. But you're still we can still see any Medicare providers there's no restriction in that so that's a big differentiator from the individual market earlier you mentioned the private so that we're giving our example shown at thirty one million dollars that's the rap cost for you guys so you still got the aim be going on all the cost sharing of going after members thirty one million a portion of that the painting contributions to write I mean they have a hundred dollar a month contribution so you could say that component of it as well bye bye the lower cost program that that still has all the same providers with no restrictions on that there's no cap you know it's the same benefit design So am I correct it if we kept the option for our employees the benefits would not be as much the savings would not be as much is that correct that's correct okay But our with our state employees would be required to go to Medicaid. I mean you could make the if we made that decision right I mean that would be your decision and what you there will be a lot of decisions in that I mean if you wanted to have a Medicare advantage option and you look at the cost of that. Maybe that one is so low cost it is a much lower contribution if you choose that plan and then you still have the Medicare plus up available at a much higher contribution you you may even decide to fund of the portion that you'd be put funding for the Medicare advantage plan and let somebody have a by up to the other plans so there's a lot of strategies but but the bottom line is that would be your decision if you want to do to to do a full replacement on a with a Medicare advantage plan or if you wanted to have both and have those choices so we work in the state of North Carolina one of my clients and they have Medicare advantage now also have a Medicare subsidized by side both women the same contribution amount they actually have it over eighty percent of people are the Medicare advantage plan because of all the enhanced benefit the curtain talked about so people are selecting a plan they can go in the Mets of plan same price contribution was but there's so much better value in the MA plan that they selected in that plan. A value in the benefits that they would receive the correct like a cost to the employee is the same exactly the same contribution amount okay. Total five year. Jim in the med sub plan is you know cost this the state a total premiums over four hundred dollars which I think is consistent with what yours is and the Medicare advantage plan is actually it's zero dollars they have a zero dollar plan which is unique with pharmacy so that's unusual and but in general you can the big differential so yes the once in the going to them a plan because it's a huge savings but they give the member the option and yet and the members choose and because of the better but better value and the fact that you know there was a lot of there's a lot of communications right I mean people are retirees there's the individual market is so ingrained in people's mind that the the view it as very restrictive in the MA plans a so so I to the gate people are fearful that. But over time they understand that okay it's the same providers and you needed to set the scene communications explain the program and you know retirees get it I mean after they see it and they get it you know so I mean I think the only reason a retiree would would not go into a Medicare advantage plan if they have the choices is fear that they're gonna lose something or just inertia I'm I'm scared to move because I don't know what that means but when they have moved we've had. A hundred percent satisfaction. And nobody's moving back over I mean there is and and and one of the things I mean we model the savings that were put in front of you based on benefits that are the same effectively as the benefits that are offered today with the enhanced benefits that would come along with Medicare advantage and and and some of the medical management that does come along with it. So. Some people I think you brought the question of the the questions about the vaccine okay if you don't want to take the shingles or whatever. You're not penalized for that. Individually. So if you if you choose not to do the wellness or the the visits the quarterly visits to your doctor or whatever are you penalized if you do not do those things no there's no problem nope they may give you an incentive they may say we'll give you a twenty five dollar gift card for you to go see your primary care provider and we well that's great yes but you know I have thirty thousand people in my district yes some of those people are not going to want to go to the doctor they're not going to let people come into their home they're not going to want takes certain vaccines I don't want them to be penalized for that I agree so if you don't if you don't want to take the phone call I am phone slam doors somebody's face you're welcome to that as well with no change in the premium that you need. Our thank you and and you know just from experience. With these house call programs every time we put one in the State of course people that I don't want someone coming into my home. But if in and they choose like whose top of the list to go in like whose whose could benefit most who's at risk who needs that help and and then we get people calling saying well my neighbor got somebody to come to her house why cannot get one so so. It so we definitely understand we. Absolutely a hundred percent agree with you I don't want to. Through a health plan or or some kind of switch in a change like this create a situation where somebody is required to do something they were required to do before. Okay representative Dawson back you. Thank you Mr so. I guess I'm still thinking of the individual Medicare advantage plans that have copays stop losses and things of that nature it doubles that you have to meet as. This group plan has none of that is that what I'm understanding it it's just like. You take your Medicare card into if you have Medicare and and then your supplement card in. When you change that out. You're just gonna be taking in one card which is your Medicare advantage plan and there's not going to be any copays at the doctor's office if we can set up a plan designed to mimic exactly what you have right now now it what we like to do so with your coordination of benefits method. Because somebody goes to a doctor and it's a hundred dollars and. Medicare pays eighty dollars and then the twenty dollars comes over to you whatever that benefit design is it may be you know even if it's a copay sometimes what you get the coordination and it's a little different but but maybe we or maybe it was a percentage but we're gonna change it to a copay to make it super simple equivalent to what you've been paying we don't want people calling you guys say you change my plan and now it used to cost me five dollars to go to the doctor not cost me ten dollars to go to the doctor we don't that's not what we want to make something equivalent to what you're what they're used to right now and these plans are are based off of what the AS the PSE plans are right now the the the premium in the classic the basic whichever one they happen to be on is that that's correct okay the other areas around the the premium plan races will this this sounds like a great deal it obviously for the state and fairly seamless for the the beneficiaries and with a lot of increase benefit however that typically comes at some sort of a cost to someone what sort of push back or we can get from the providers act because you can increase benefits without increasing. Costs somewhere or reducing benefits or reducing reimbursements to providers it's is there a difference in what the Medicare advantage. Reimburses verses what regular Medicare advantage regular Medicare reimburses providers no and in fact they when they set up contracts are going to be value based contracts to say so they're trying to get their star ratings up they're trying to make sure they have all the coding correctly so what they're gonna do is set up contracts that pay you what you're getting paid now plus. Some bonus if you do all the coding if you either they're gonna have those contracts set up a meeting as a country. But we pay for care when you're sick and we know that's not the way to do it we know we want to pay physicians to keep you healthy so actually I think this is one of the biggest. Successes of the accountable Care Act is how they how they changed the Medicare advantage program to cut the cost you're getting automatically and require you to do all these things to show quality and then you get bonus payment and by doing that they got rid of the plans that couldn't do it. And big competition among the ones that can and any time you go into a new place and a pro and you have providers in Arkansas who I mean there's there's twenty to thirty percent penetration which means there are physicians that have contracts with the age most that are here they're also physicians out there that don't have contracts that may not know about this and what we do when we go out and print your Medicare advantage plan is we'll send out all the data showing who the providers are what who who's the top provider all the way down so that it is on. The carrier to start reaching out to those providers and letting them know we're gonna have this plan here's how you reach me in here all there's a lot of of education we did this in the state of Alabama they actually had a traveling. The bus or something that would go to all you know me with all these different providers and make sure they're getting the support and understanding they need to make it happen but when I talked about that passive PPO in the fifty one percent rule. What comes under that in in that part the medic the employer group waiver plan secretary chapter nine. says it is on the on the carrier to make sure if somebody goes and and they're provider doesn't understand they're making sure that they're reaching out that provider and they're the ones on the hook to make sure they understand how this works so this group Medicare advantage reimburses differently than it individual one like if somebody goes out there and what you what providers are used to in this state. We're gonna have to have probably some education to say that that this group Medicare advantage everybody's moving over to it on the retirement system that is a better reimbursement or at least equivalent to what you're getting Medicare reimbursed right now as opposed to. The regular Medicare advantage that might reimburse less for an individual plan. For for a contracted provider yes on you can get more money if you want to contract and and do the coding make sure all these things are good and get the bonus payments you can also be accepting but not under contract meaning yep you'll accept you'll send the claims in well covered at a hundred percent of Medicare but I don't want to do all the things give me to do so I don't want to bonus payment thank you very much okay thank you but you get pay what you would get paid under Medicare regular Medicare and faster because it's not being adjudicated twice yeah the savings persons talking about it's really not. It's not really from changing you know reducing the provider reimbursement it's more the thing she she mention before so you have Ananus population I have a managed piece to it so that's gonna and three drop claims and then you're maximizing the federal revenue that's a big. And I appreciate all these questions because it is it is complicated and and you have the individual market you I had what happens you know back in the nineties and early two thousands that maybe are good stories they they have really seventy five percent of. Of Senators federal government and congresspeople have signed letters this you're saying please make sure you take care of Medicare advantage it is such a good program and the and the kicker is you're telling me I get a free lunch but doesn't come that doesn't happen right where's the catch there's not one. There's not one it's a win win all the way around. Can you really have to realize that it think of it as the group plan and you have to differentiate that from the individual planets there's there's just differences between the two and the individual almost think of it as an active plan an active exchange plan versus your plan kind of the same model I mean your plan you can go and see every Dotson I got a huge network also that's different than the exchange plan might be so thank you but that way it's totally different it's a it's a group product you know all the things occurs in mentioned it's you know. So I do think you know there would need to be if if you wanted to make this change there would need to be a lot of communication and typically when we put these plans into place the vendors will come in and they will hold retiree on meetings all over the state so retirees can come in and you know they do everything. Senior center so their call centers they train them by. Your. Making them understand what it feels like if you can't hear well if you can't see well you know they'll they'll put glasses on and and smear. Vasselin on them so you can so you can be in that moment make it really senior centric and you know same things with the meetings in the State they'll go and they'll find whatever you know is a good place good places around the state to hold meetings make sure or you know if there are no ramps their new and usually on. At a at a local restaurant or something like that but you know this year with COVID they did everything obviously not in person but but they'll do lots to make sure there is communication representative Crawford you're recognized thank you. everything you're saying sounds wonderful which it sounds too good to be true it normally is. thinking about our constituents what we're actually doing it skews me if we as a body take this we're actually pushing our retirees skews me allergies we're actually pushing our retirees out of our program totally. And we are expecting them just to take. The C. aspect to where they don't have an option if we make this decision is that correct well when you say pushing them out of your program you mean changing them for the insurance so that we saved the state money no your I mean this would be your group plan you're not pushing them out and say go find here we're funding you go find yourself a plan on the exchange that the seat program is a federal program the secret program is a federal program so so Medicare a and B. original Medicare has been around forever right and then party came in that's the first time they will. As first time the cover drugs but also as a private privately run competition when they put out the projected cost for that program the first year they came in forty percent under it so it's just managed right you you actually have. Private companies that know how to do this managing we're we're part a and B. they're hiring an administrator to adjudicate claims they don't care what you do and and by the way if you're a member who has. Multiple conditions going on you have nobody seeing the whole picture from a from a clinical standpoint right you go to this doctor for this and this doctor for that and you know this is where you actually have somebody looking at everything that's going on in helping. Helping put that picture together have a holistic view of a person and. Man. C.. You're not asking them to sign up for Medicare part see you're just saying instead of. Either alongside the premier plan or instead of the premier plan we have a Medicare advantage plan for you you can. Yep or you can do it for placement you if you did a for a place you could also enroll them without them doing anything. So is it is still under the control of your plan and you want to under the control of your plan because because you can tell the vendors I will I want. This type of benefit design. These you know this. Okay long as it is optional because I didn't understand it be an option shall send you could you could do optional or you could do a replacement it depends on what we as a body decides that's right okay. With us in the body is in your note It's still even even if you had a Medicare advantage plan still your plan so they're rolling through you if you're your group but it happens to utilize a provider that gets reimbursed through Plancy so it doesn't mean doesn't take you out of the loop you're still managing that plan every year you're dealing with renewals with that vendor I mean you're still control and so you're you're still driving to. Right you you would still have communications you would do like you do today communicate with your retirees here your your your plan options this year They enroll or don't enroll you send that over to the carrier they they send it in to CMS and set all that up it comes back to you but everything's going what we decide yes right yep so if we as a body chose to do this then we would be. To save the state money would be pushing our retirees that if we chose it's about to do that not you're still the retirees will still be part of the group program offered by the state what made change would be potentially the carrier would be a different carrier may not be the premier plan that they would be enrolling in anymore you may change the name of that program for the benefit structure would look a little different but it's still a group based program that's offered through the state to retirees so you guys can set you up for more control of that you're not pushing retirees out of the group program they would still be part they would be able to get this program elsewhere not enrolling in the planned through the state's retiring and if you had as an option to annually if they want to change back they could and actually a lot of the plans like in North Carolina they given the three month window after the beginning the plan year to go back in there so plan if they don't like them a plan so yeah having it sounds like you know you. For a lottery number reasons maybe out of the gate you put it as a side by side option and maybe the Medicare advantage plan has a lower contribution for retirees because at the you saving money so the state save money retiree says money hopefully it's a win win. Okay we'll roof party right. Okay Similar to the way I was showing Medicare advantage key date someone to talk about some Medicare part D. key dates the first is where we were on Medicare advantage two thousand six the Medicare modernization act introduced coverage for pharmacy is the first time. there was pharmacy coverage. Again the eight what plans were introduced and they also established the retiree drug subsidy at that point and we'll talk about that that's where you currently are with your members. For. ASC. and public school don't have coverage on party currently. So in two thousand eleven again this was under the affordable Care Act if you recall it will go through in a minute originally when they came out with this product there was a doughnut hole and when the affordable Care Act came in it put some coverage in the doughnut hole that would phase out by twenty twenty and because of that people wanted to take advantage of that and it was a rap benefit. Which is a little bit confusing in two thousand thirteen the change that need for the rap in two thousand nineteen the change the coverage that discount from fifty percent to seventy percent. And in twenty twenty the coverage gap phase out was complete. That's a lot of that's a lot of dates and a lot of numbers but it just comes that kind of sets up we're going to Senate. So. Again in two thousand six two thousand six we have the Medicare modernization act they put this party benefit and the place and that was what was called the standard part B. benefit and this is it on page thirty so the standard part B. benefit had a deductible of two hundred fifty dollars and then I had initial coverage phase after the adopt a deductible so after two hundred fifty up to twenty two fifty the member paid twenty five percent. And the plan paid seventy five percent once they hit the twenty to fifty in total drugs been than they were in the donut hole until they paid thirty six hundred dollars in out of pocket costs which is equal to fifty one hundred dollars in total costs. And after that they went into the catastrophic phase so that was the original plan. at the same time so big gap between the initial coverage limit the out of pocket threshold where the member was on the hook for a hundred percent of the cost. So at the same time that they came up with standard party they came they also put into place the RDS subsidy process. So retiree drug subsidy was set up to pay twenty eight percent of each eligible retirees spend between above two hundred fifty dollars and under five thousand dollars. is exquisite excludes non Medicare part D. drugs so anything that is not allowed to be on the Medicare part B. for military doesn't doesn't get this retiree drug subsidy is net of formulae rebate payments and the plan has to have an actuarial equivalent accreditation that annually which isn't is. And accreditation by an actuary the says my plans at least as good as a part of the standard plan and they have sent notices annually. Here's the most important thing already S. was designed to encourage employers to continue offering prescription drugs to their retirees so they wouldn't dump them out into the market. That was because they had no data they were trying to price this thing for the first time and they didn't want employers to put them out there because they were so at risk for the pricing but it was designed to produce similar reimbursements to a plan as the part D. plan and when I say aye the party plan I'm talking about. The standard party plan we just looked at. So. They were meant to be equivalent so on this page but what happened over time was it you can see on the left here in two thousand ten we're talking about that coverage gap the donut hole. Members were paying a hundred percent of the cost but A. C. A. came in. An overnight. The representative brand drugs was being picked up by the manufacturers drug manufacturers. And then they phased in that The more and more would be picked up by the plan over time so eventually. The member would be paying twenty five percent in the dark in the coverage gap at also known as the donut hole while there was no coverage which would be similar to that initial coverage phase that fifty percent. In two thousand nineteen got changed to seventy percent. So all of those dollars that are being picked up by the manufacturers. Is not being reimbursed if you're in a retiree drug subsidy because the retiree drug subsidy was set up to mimic the standard part D. plan and now you have all these additional dollars being paid that you never there was never an adjustment to the retiree drug subsidy so big difference in payments. So now if we look at the standard part B. benefit today the difference is that middle section the coverage gap phase so so same thing we saw was phased in over time but now what you have is. Deductible which now it's gone from two fifty to four forty five and then over on the left side that blue is what is being paid by enrollees again we're talking individual market plan here but this is this is what everything's based on over to the side over on the right side we always had that seventy five percent paid by the plan and the national initial coverage phase but if you get that coverage gap phase now the plans pay is seventy five percent of generics the manufacturers are picking up seventy percent of the brands and then the plants picking up the other five percent. What happened when when. In. We we also if you think about the retiree drug subsidy it has a limit it's paying you twenty eight percent between now for forty five and ninety one hundred but we have so much costlier drugs now with all of the all of the specialty drugs so it's not getting any coverage any reimbursement when you're over a certain one. So again that's the individual standard party planned so wasn't employer employer group waiver plan. It is a Medicare part D. plan but has waivers just like the medical side does. that encourages employers to be in the plan is customizable. Like like on the medical medical side but you have all of these additional. Subsidies available to you so the Medicare part D. coverage gap discount program is available to and whips you get catastrophic coverage in low income subsidies are available for an eligible participants which are available under the retiree drug subsidy program. So we look at page thirty six. This is what on if you look at what's happened over time in two thousand six RDS is the dark blue bar inmate PD or the red bars in light blue or the part B.. Individual plans I'm I'm sorry not individual plans party plans for group said these a group plans. So originally you had the majority in the RDS plans. In two thousand your when you move from two thousand ten to two thousand twelve the drop off when you took me from two thousand twelve two thirds and thousand fourteen a drop off significantly that's when all the stuff got changed and everybody realize I can get more money if I'm under a part D. plan then I am a retiree drug subsidy. If you look at the next page this is the opposite side I was retiree drug subsidy coming down and and here's what happened party enrollment by type of coverage in on here this is a retiree drug subsidy there's the part in may in part D. plans and they increased for that same reason. So this is just the opposite look of retired drug subsidy going down. Party enrollment going up. On the next page. This is a look at. The market a robust market on all of these. Carriers or administering party plans today again you have United healthcare humana CVS will care but cigna Blue Cross many others all of them can can manage a party planned a party plan may be separate or it could be included with a Medicare advantage plan so you can see that some of the same inmate carriers we talked about before or on the top of this list as well. So here's a little bit of a recap of what we're talking about with the subsidies under RTS you get. The RTS subsidy capped at twenty eight percent between the cost threshold in the cost limit. But you get none of these other subsidies under and with you don't get an RTS subsidy you get the coverage got that gap discount program subsidy you catastrophic read catastrophic reinsurance subsidy and there's also a party direct subsidy and then also low income subsidy for your members. That are low income. So that's. Kind of how this one works and on the on the next page page forty we are also making an assessment so estimated R. exclaims that rebates in RTS currently is twenty five and a half million and we're estimating that twenty to forty percent is what you could save per year by getting these other subsidies which would equate to a potential cash savings in the way of five to ten million dollars. And this is based on experience with other clients that a transition to act with but also met impact had had provided. Yeah they met in high provided an analysis on this and and the the savings estimate fell within this range for your speech. and and again I mean that person mentioned that this would be based on similar or the same provisions that are currently provided. And and whatnot for prescription drugs. Coverage. And this is exclusively for state employees public school employees do not receive for sixty five drug coverage so this would not apply to them. In. And if you look at the next page. Similar to what we did before we also looked at the OPEB liability impact. There's more OPEB liability impact from moving to party versus RTS then there is savings annually so we said the savings and it would be between twenty and forty percent. But if we look at the savings opportunity under liability liability we're moving that twenty to forty up to thirty five to fifty and the reason is because gas gas be government account government accounting standards board does not allow you to account for the retiree drug subsidy this coming in when you when you start with your bottom line cost yeah so from a cash flow perspective you're receiving roughly five million dollars a year in RDS subsidy and we we noted out that costs so four year if we were just project out cash flows from a liability perspective on a net basis net of RDS subsidy or on twenty five million dollars in cash what you need to what you need to stream out for guys be purposes since RTS campy included it's an additional five million dollars that would be on top of those costs of your prescription drug portion of costs would be increased by five minutes instead of twenty five million it's it's a thirty million dollar costs which on is on on its own just twenty percent increase in annual dollars that's being projected for the liability development and we talked earlier around many of the states moving from RDS this was a big reason for that because you get you get the benefit of the reduction in premium from moving from RDS Act with you can take that into account and your liability stream so not only you're seeing just general cash savings even if they were on a net neutral basis in terms of the overall costs there would still be savings from a liability perspective for Act with verses RDS member there's only the benchmark in the ended earlier there is two states that don't have an at will program that was you guys and one other state. So from an overhead perspective you know we did at a similar estimate of what it how much of your liabilities post sixty five and was the pharmacy portion of it and we're estimating that Europa of savings could be anywhere from two hundred five million to fourteen twenty nine million Chinese these ranges were put together based on other other state clients that we have for Gatsby overall liabilities for the percentages in terms of the liability estimate and the the R. X. portion of sixty five liability the two point six billion dollar liability was from II Milliman reports that's that's something that's on the books for Arkansas but the ranges that we provided our our estimates for what we would see in savings breaking out that liability between medical costs people sixty five and are exposed. And. You know a lot of times you can do a lot of times you put in the medical part in the pharmacy part together in a minute Medicare advantage with party. Yeah we looked earlier at the medical side of it that there's such a leveraging effect on claims and on risk scores sometimes we when when we have plans that put them together Is so leveraged that you can get to below zero dollars and that and if you get there that can be used to buy the part decide to so sometimes is really advantageous to put the two together there's not a reason not to typically. But you don't have to I mean it's something you this can be done this can be done on its own for a S. C. retirees or it can be done in combination with moving to a Medicare advantage program the the one I guess Cabot is on the public school yes we'll talk about that in a minute but not before before we go to that you know if I look back at what we're looking at for savings for medical and pharmacy and I wish I'd put in both on the on the same page on. If you put the two together you're looking at. Eleven to thirty million dollars annually in savings and on OPEB liability basis. At nine under three hundred and nine hundred million you that you can take off your of have and that's assuming there's no additional benefits that you mentioned that. I mean I think you can go by the savings range or even looking at. So and under New York in the get to question representative Dotson. Thank you Mr chair and. This may go into what you're and talk to about PSC's in just a minute but If I'm reading it had. Are you basically saying that. We can't do this with public school employees or it's we just have to include the Medicaid part D. or the Medicare part D. the prescription drug if we do it yeah let's go let's go over there to page forty three. So yes challenges for public school Medicare retirees currently no pharmacy benefits. And so you cannot do a Medicare advantage plan for them and here's why if they don't have pharmacy benefits they're going out there buying an individual part B. plan or they're getting coverage somewhere else so we can't do it at all and if if you put a Medicare advantage medical plan and they're in one it'll kick them out of the other plan and and that's set up to protect to protect Medicare eligible because they'll have different people calling in trying to sell them things and they don't want them to be signed up for multiple plans I mean it is so so yes that that's the challenge for public schools all the estimates that we did or for state only. seven so. The only option to consider and and I don't know Hey I don't know how how they came to be without and and what that takes but is if you moved PSE you could consider making it if the numbers were right would you want to consider covering draw for them. putting in a Medicare advantage part D. plan it might be cheaper than the Medicare advantage plan that you have currently. And supplement plan are you going to be looking at that as part of your overall recommendation the next couple of months we are okay we are and then I think with just a general question with regards to the the employer contribution of four fifty per member That total dollar amount that were were doing basically in addition to. Any potential savings that we're looking at our are you looking at projecting. The cost of that and recommendations on whether or not we continue with that sort of a a. Per employee four fifty contribution or a just a a lump sum this is what we're setting aside to go toward these plans in to Tallahassee and if that total amount would get us closer to the the baseline average the benchmark averages whatever the employer contribution is in other states in your overall. Recommendation analysis. Thank you I think that's just yeah that's a completely separate analysis that were gonna be looking into so that's coming AM I guess I'm asking you is not. Art of this presentation of this coming okay thank you not not today or tomorrow but it's. And then if I go back one page page forty two I did want to just. Say that There's a lot of interest in prescription drug. Los hand and designs federally and we've heard about that over the past couple of years there's several several proposals that have been put on the table most favored nations model removing safe harbor FOR Medicare drug rebates which is a point of sale rebate prescription drug importation part the redesigned Drug price inflation rebates you know we try to stay on top of that I just want to say that everything we've done is based on today's law we try to stay on top of this to know what's going on I actually was talking to some folks yesterday to try to we know that we know that The the house has passed H. R. three which addresses some of these things before even before COVID came along the Senate was looking at the prescription drug pricing reduction act but the Senate's turned over we have a new majority Senate finance committee they're looking at it they're learning about it and you know most of all we still have a lot of dollars from COVID and all of these bills that have been put out so top of mind is on a very small when you look at a party plan a very small percentage of people are uncapped because they go out into catastrophic that those are the folks that are on home specialty drugs as an issue they need to solve for but at this point of sale rebates that went through and got delayed is going to cost the federal government a hundred and sixty nine million dollars over ten years if they get rid of that they can use that money for something else so we never know where this is standing just wanted to make sure that we knowledge that we don't know what happens tomorrow but we try to stay on top of those things. Yeah and and just update probably obvious but if if some of these laws passed related to Medicare prescription drugs that would change some of these savings opportunities that exist for the program as as we put in today so. But we honestly don't think you'd be worse off than. The gap is there today. I think we first came here and in a new interview for the consulting job we talked about things that we saw that we thought were you know talk about low hanging fruit or things that you can actually save money with you know without hurting people you know better better equivalent benefits really just a financing mechanism for the most part ASA communications all that kind of stuff but I think the things the Kirsten address today was exactly what we're talking about that M. J. plantigrade option your you know what to do for placement you could do a good as a side by side as an option Sabin to be a little less but still get savings the I would component of its you know. Almost every almost every single state does it for the reasons we discussed and and all of them you know there's not a a benefit reduction so I mean we're those are really when winds and hopefully hopefully we convey that innocent it's complicated and you know there's a lot of moving parts but in general you know think about it is it is is to enhance. And and the the difference here and talking about the retirees in addition to some of the cash savings that we're talking about there is that liability component that you would see savings as well which is which and portent consideration to to. You want because you're here for yeah I think we met and talked about it but I mean if if if it's appropriate for you guys you're okay with that we like the lease just talked to the market and get give them some high level data on your program and they would give us estimated quotes so give you a little harder numbers than you know our estimates of what think would be and you knock them in anything you're not committing to the number you're not doing and it's just really getting some viewpoint from the market and we ask all the big players to participate in. Okay saying no other questions of good information pressure to questions Members and colleagues and we will be back at nine o'clock tomorrow morning thank. Thank you thank you.