The State of Healthcare Benefits Overview
This overview touches on the current state of healthcare benefits, including the challenges and trends in the larger and smaller worlds we live in. Details on healthcare spending, cost management strategies, and church plan benchmarks are highlighted.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
The State of Healthcare Benefits Pat Haines Senior Vice President, Benefits
Topical Overview The Context for Change Considered Alternatives and Resulting Options The Impact of Healthcare Reform The Importance of Health 2
The Context for Change: The Larger World in Which We Live Cost is the Challenge 3
The Context for Change: The Larger World in Which We Live Healthcare Spending Amount: $2.8 trillion in 2013; 18% of GNP Pace: > inflation; > growth in national income Drivers: Technology; Prescription Drugs; Rise in Chronic Disease; Administrative Costs Payers: Medicare, Medicaid, Private Plans, Individuals 4
The Context for Change: The Larger World in Which We Live Large Employer Trends Cost Shifting: Premium and Point-of-Service Cost Sharing Cost Management: Incentives and Penalties Provider Management: High Performance Networks; Reference-based Pricing all about Value 5
The Context for Change: The Smaller World in Which We Live Cost is still the Challenge 6
Church Plans Plan Approximate Annual Cost Cost sharing policy/practice $8,688/M Each employer is responsible for at least 50% of member cost; may share none, some or all of remainder of member + dependent cost Lutheran Church, Missouri Synod (LCMS) $14,496/M + C $17,472/M + P $23,220/M + F 8
Church Plans Plan Approximate Annual Cost 6 rate classes Cost sharing policy/practice Church responsible for dues but opt-out permitted at all levels. Evangelical Lutheran Church of America (ELCA) 12.3% - 14.9%/ M 21.6% - 26.2%/ M + C or P 30.8% - 37.4%/ M + F 9
Church Plans Plan Approximate Annual Cost Cost sharing policy/practice $8,412/M Church responsible for 100% of member only cost; may share none, some or ALL of dependent coverage cost Evangelical Covenant Order (ECO) $15,996/M + C $17,676/M + P $25,248/M + F 10
The Context for Change: The Smaller World in Which We Live Key Statistics Demographics Utilization Financials 11
Facts about Member Demographics and Church Size
Covered Population Demographics Members participating in Traditional Medical Plan as a result of their employment with a church or employing organization Approximately 12,100 65% are Teaching Elders 35% are Lay employees 13
Participation at Minimum 15% (1,178) of Teaching Elders participate at the 2013 minimum of $40,000 59% (2,441) of Lay members participate at the 2013 minimum 30% (3,619) of all members participate at the 2013 minimum 14
Participation at Maximum 1.7% (137) of Teaching Elders participate at the 2013 maximum of $124,000 1.2% (52) of Lay members participate at the 2013 maximum 1.5% (189) of all members participate at 2013 maximum 15
Population by Salary LAY TEACHING ELDER 2,750 2,441 2,500 2,250 2,009 2,000 1,750 1,644 MEMBER COUNT 1,500 1,267 1,178 1,250 1,000 821 750 750 458 500 398 258 194 157 250 137 125 81 59 52 29 18 17 0 Under $40,000 40,000 - 50,500 50,501 - 61,000 61,001 - 71,500 71,501 - 82,000 82,001 - 92,500 92,501 - 102,500 102,501 - 113,000 113,001 - 124,000 Above $124,000 2013 FTE SALARY 78% of Lay members 40% of Teaching Elders 1.7% of Lay members 2.7% of Teaching Elders 16
Participation by Family Configuration 16% at Member Only 5% at Member + Children 33% at Member + Covered Partner 46% at Member + Family 17
Family Configuration by Salary MEMBER ONLY MEMBER/CHILDREN MEMBER/COVERED PARTNER MEMBER/FAMILY 100% 90% 36.9% 80% 43.9% 50.5% 50.8% 53.6% 54.0% 55.6% 56.5% 70% 63.0% 66.7% 60% 50% 34.9% 40% 32.7% 30.1% 30% 29.4% 39.7% 33.6% 31.9% 39.7% 6.1% 5.1% 32.3% 26.3% 20% 3.8% 3.8% 22.1% 3.5% 10% 2.9% 18.4% 3.1% 15.3% 1.0% 11.2% 1.7% 9.3% 8.7% 1.1% 6.6% 6.1% 4.6% 3.7% Above $124,000 0% Under $40,000 40,000 - 50,500 50,501 - 61,000 61,001 - 71,500 71,501 - 82,000 82,001 - 92,500 92,501 - 102,500 102,501 - 113,000 113,001 - 124,000 2013 FTE SALARY 18
Population by Age MEMBER DEPENDENT 12,000 10,800 9,600 8,400 AVG COVERED LIVES 7,200 3,641 6,000 11,346 4,800 2,607 3,600 1,585 4,885 2,400 1,443 1,045 3,199 1,200 1,874 1,234 1,078 0 Under 25 25 - 35 35 - 45 45 - 55 55 - 65 Over 65 19
Member Age by Salary Under 25 25 - 35 35 - 45 45 - 55 55 - 65 Over 65 100% 5.6% 7.5% 8.0% 8.1% 9.1% 9.7% 9.8% 10.6% 11.0% 13.1% 90% 80% 35.7% 39.9% 40.1% 70% 37.9% 50.6% 47.2% 49.4% 48.1% 50.0% 48.1% 60% 50% 24.4% 40% 25.2% 25.1% 28.8% 30% 31.2% 32.6% 29.1% 30.3% 25.0% 26.9% 17.4% 20% 13.3% 18.7% 17.3% 10% 10.7% 13.6% 14.4% 11.2% 11.7% 10.6% 11.3% 11.2% 8.6% 4.1% 61,001 - 71,500 2.9% 71,501 - 82,000 1.3% 82,001 - 92,500 1.1% 92,501 - 102,500 0.8% 102,501 - 113,000 0.6% Over $124,000 0% 0.0% 113,001 - 124,000 Under $40,000 40,000 - 50,500 50,501 - 61,000 2013 FTE SALARY 20
Family Configuration by Member Age MEMBER ONLY MEMBER/CHILDREN MEMBER/COVERED PARTNER MEMBER/FAMILY 100% 7.7% 8.3% 90% 31.8% 23.1% 80% 43.3% 70% 5.1% 67.2% 74.8% 60% 66.8% 50% 48.7% 27.9% 40% 64.1% 30% 2.5% 12.9% 0.7% 7.8% 20% 3.8% 7.6% 5.1% 26.3% 24.2% 10% 15.7% 12.3% 12.2% 0% Under 25 25 - 35 35 - 45 45 - 55 55 - 65 Over 65 AGE RANGE 21
Churches and Employing Organizations The Board bills over 6,600 churches and employing organizations with Traditional members every month 76% (5019) have an individual member 23% (1530) have 2 to 10 members 1% (79) have more than 10 members 22
Age: A factor but not the whole story Average Paid per Covered Life $7,000 14,000 $6,554 $6,169 $6,000 12,000 $5,000 10,000 $4,000 8,000 $3,694 $2,837 $2,794 $3,000 6,000 $1,865 $2,000 4,000 $1,000 2,000 $0 0 Under 25 25 - 35 35 - 45 45 - 55 55 - 65 65 & Above 2012 2011 2010 24
Teaching Elder vs. Lay: A factor but not the whole story Average Paid per Covered Life $5,000 $4,335 $4,500 $4,000 $3,588 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Lay Teaching Elder 2012 2011 2010 25
Dependent Status: A factor but not the whole story 53% of total claims paid for Members 47% of total claims paid for Dependents Maximum variation of 1.4% over last 36 months 26
High-Cost Claimants Consistently the single largest contributor to trend 1% of claimants responsible for 30% of expense Indiscriminate with regard to age, gender, and income 27
Average Costs per Active Member The average cost per Active Member (in the Traditional Plan) per year is $12,000 Individual Member: $7,200 Members With One or More Dependents: $13,000 28
Relationship Between Dues and Cost The Value of Community Nature Minimum Dues $8,400 = 70% of $12,000 Average Cost Maximum Dues $26,000 = 217% of $12,000 Average Cost 29
Financial Forecasts An Art and A Science
Current Milliman Projections (in $1,000s) 2012 $171,507 2013 $176,153 Total Revenue Total Expenses $173,891 $182,517 Net Income Fund Balance (Reserve) $(2,384) $66,313 (38.1%) $(6,364) $60,110 (32.9%) 31
Current Milliman Projections (in $1,000s) 2014 $170,984 2015 $169,553 Total Revenue Total Expenses $189,271 $196,154 Net Income $(18,287) $(26,601) Fund Balance (Reserve) $39,700 (21%) $11,978 ( 6%) 32
Considered Alternatives and . Resulting Options
Expense Shifting Alternatives Double Office Copays Increase Plan Copayment by 50% Increase Deductibles by 60% Increase Copayment Maximum by 40% Add Emergency Room Copay (per visit) Double Rx Plan Copays GRAND TOTAL = $13.7 Mil 34
Revenue Raising Options: Underlying Assumptions Minimum Salary: Increased to $42,000 in 2014 and to $44,000 in 2015 Target Fund Balance (Reserve): remains at 20% - 33% (2 - 4 months of estimated claims) Call to Health : Initiate a model designed to improve member health in 2014 35
OPTION A Action 2014 Dues 2015 Dues Maintain Current Dues Model 23% effective salary 24.3% effective salary 36
OPTION B Action 2014 Dues (Annual) Member: 21% + Child(ren) = $534 + Partner = $664 + Family = $1,165 2015 Dues (Annual) Member: 22% Maintain Dues at 21% for Member only; Introduce Dependent Coverage Tiers at flat amounts (Flat dollar amounts TBD) 37
OPTION C Action 2014 Dues 2015 Dues Set Dues at % of effective salary and a lesser % for member only coverage Dues w/ Dependents = 23% Dues w/o Dependents = 21% Dues w/ Dependents = 25% Dues w/o Dependents = 22% 38
OPTION C Maximum Member Contribution Towards Family Coverage (2014) Minimum ($42,000) Median ($54,000) Maximum ($124,000) Annually $840 $1,080 $2,480 Monthly $70 $90 $207 39
Comparative View of Options Community Nature Flexibility Member Responsibility & Awareness Quality & Member Service Advocacy Option A (23%) Option B (21% + flat premium by tier Option C 23% / 21% 40
The Impact of Healthcare Reform Cost is still the Challenge 41
Healthcare Reform: A Look Back Primary Objectives Address Access and Affordability Reduce the Number of Uninsured Americans Early Challenges Political Judicial 42
Healthcare Reform: Direct Impact Expanded Coverage: Adult Children; Lifetime Maximums; Preventive Care Communication: Summary of Benefits and Coverage; Notice of Exchange Coverage 43
Healthcare Reform: Direct Impact Government Subsidy : Early Retiree Reinsurance Program; Medicare Part D; Small Employer Tax Credit Assessed Fees: Patient-Centered Outcomes Research; Transitional Reinsurance 44
Healthcare Reform: Potential Impact Nondiscrimination Rules Payment Reforms Exchanges (Marketplaces): Public and Private 45
The Importance of Health Cost is not the Only Challenge 46
Call to Health Goals: Improved Member Health Sustained Effort Significant Rewards and Consequences No Added Cost 47
Call to Health Timeline 2014 Define and Monitor 2014 Health Actions 2015 Resulting Consequence 2015 Define and Monitor 2015 Health Actions 2016 Resulting Consequence 48
Call to Health: To Care and To Take Care You Are Called To Be Conscious Accountable Responsible Engaged 49
OUR COMMITMENT Three Strategic Objectives Provide quality coverage that offers real financial protection when it s needed Support Community Nature, balancing the needs of ALL members Ensure the Plan s financial solvency by maintaining adequate reserves 50
