health insurance briefing 22 july 2010 changes in the health insurance programmes

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Health Insurance BriefingHealth Insurance Briefing22 July 2010 22 July 2010

CHANGES IN THE CHANGES IN THE HEALTH INSURANCE HEALTH INSURANCE

PROGRAMMESPROGRAMMES

www.un.org/insurancewww.un.org/insurance

22www.un.org/insurancewww.un.org/insurance

HEALTH INSURANCEHEALTH INSURANCE

Self Funded programmeSelf Funded programme Uses expert administrative services Uses expert administrative services

of insurance carriersof insurance carriers Carriers paid fees to use provider Carriers paid fees to use provider

networks and services of expertsnetworks and services of experts Risk responsibilityRisk responsibility July to June cycle for US-based plansJuly to June cycle for US-based plans Jan to Dec cycle for other plansJan to Dec cycle for other plans


Cost containment Cost containment and Education initiativesand Education initiatives

Containing costs is a shared responsibility of all participants in the UN Containing costs is a shared responsibility of all participants in the UN plans. This can be achieved by being a knowledgeable consumer and plans. This can be achieved by being a knowledgeable consumer and selecting medical care providers from the vast number of doctors in the selecting medical care providers from the vast number of doctors in the Aetna and Empire Blue Cross networks. A visit to an in-network doctor or Aetna and Empire Blue Cross networks. A visit to an in-network doctor or care provider is less costly than a visit to an out-of-network care provider care provider is less costly than a visit to an out-of-network care provider for both the staff and the plan. for both the staff and the plan.

Cost containment is also available through wellness initiatives. Health Cost containment is also available through wellness initiatives. Health improvements and cost reductions have started to become apparent as improvements and cost reductions have started to become apparent as staff and retirees are using the disease management and wellness features staff and retirees are using the disease management and wellness features available to Aetna and Empire Blue Cross participants through the available to Aetna and Empire Blue Cross participants through the ActiveHealth programme implemented in December 2008. Staff are ActiveHealth programme implemented in December 2008. Staff are encouraged to make full use of the ActiveHealth programme so as to encouraged to make full use of the ActiveHealth programme so as to obtain maximum benefits from both a health/wellness perspective and plan obtain maximum benefits from both a health/wellness perspective and plan cost perspective.cost perspective.

Staff and the administration also agreed to collaborate on a vigorous Staff and the administration also agreed to collaborate on a vigorous education campaign geared towards providing information to all plan education campaign geared towards providing information to all plan participants, to help participants make informed decisions to contain health participants, to help participants make informed decisions to contain health costs while continuing to have access to high quality care costs while continuing to have access to high quality care


How Premiums are DeterminedHow Premiums are Determined CLAIMSCLAIMS (total amount paid to all medical providers during the last 12 (total amount paid to all medical providers during the last 12

months)months) ++

TRENDTREND (adjustment for increase in health care utilization due to aging (adjustment for increase in health care utilization due to aging population, new procedures and technologies, newly developed population, new procedures and technologies, newly developed drugs, changes in medical practice patterns, medical inflation)drugs, changes in medical practice patterns, medical inflation)

==

PROJECTED CLAIMSPROJECTED CLAIMS (paid claims plus adjustment for trend)(paid claims plus adjustment for trend)

++

FEESFEES (administrative fees paid to insurance companies to use the carrier’s (administrative fees paid to insurance companies to use the carrier’s eligibility eligibility and claim processing expertise and benefit from discounted services that the and claim processing expertise and benefit from discounted services that the

carriers have negotiated with medical providers in their networks)carriers have negotiated with medical providers in their networks) ==

TOTAL COSTTOTAL COST (paid claims plus trend plus administrative fees)(paid claims plus trend plus administrative fees)

//

CURRENT PREMIUMCURRENT PREMIUM (total amount of employee premium contribution and organization subsidy (total amount of employee premium contribution and organization subsidy received during the last 12 months)received during the last 12 months)

==

REQUIRED INCREASEREQUIRED INCREASE (the rate increase that current premium will go up by)(the rate increase that current premium will go up by)

ExampleExample ClaimsClaims 1,000,0001,000,000 Trend at 10% + Trend at 10% + 100,000100,000 Projected claimsProjected claims 1,100,0001,100,000 Administrative feesAdministrative fees ++ 50,00050,000 Total CostTotal Cost 1,150,0001,150,000 Current PremiumCurrent Premium 1,075,0001,075,000 Rate IncreaseRate Increase 6.98%6.98%


How Premiums are DeterminedHow Premiums are Determined

CLAIMS total amounts drive the CLAIMS total amounts drive the Premiums determinationPremiums determination

It is the responsibility of each It is the responsibility of each participant to seek appropriate and participant to seek appropriate and high quality care as needed, while high quality care as needed, while paying attention to the costs paying attention to the costs incurredincurred


In-network vs. Out of Network Cost:In-network vs. Out of Network Cost:Containing costs in the USContaining costs in the US

A visit to an in-network doctor or care provider is A visit to an in-network doctor or care provider is less costly than a visit to an out-of-network care less costly than a visit to an out-of-network care provider for both the staff and the plan provider for both the staff and the plan

The insurance company has identified a group of The insurance company has identified a group of providers who are “in-network” and has providers who are “in-network” and has contracted with these providers on your behalf to contracted with these providers on your behalf to get services at “discounted” rates. get services at “discounted” rates.

The primary advantage of using an in-network The primary advantage of using an in-network provider is that you receive this discounted rate provider is that you receive this discounted rate for their services, and your insurance generally for their services, and your insurance generally picks up a larger portion of the bill than with an picks up a larger portion of the bill than with an out-of-network provider.out-of-network provider.


In-network vs. Out of Network Cost:In-network vs. Out of Network Cost:Containing costs in the USContaining costs in the US

ExampleExample

An in-network primary care physician (pcp) may charge An in-network primary care physician (pcp) may charge $140 for an office visit. Your insurance company has $140 for an office visit. Your insurance company has contracted with them to discount this visit to $80. The UN contracted with them to discount this visit to $80. The UN insurance pays 100% of the discounted cost after you pay insurance pays 100% of the discounted cost after you pay your $15 copay. This means the plan pays $65.00 and you, your $15 copay. This means the plan pays $65.00 and you, the patient pay $15. the patient pay $15.

Compare with an out-of-network physician that also Compare with an out-of-network physician that also charges $140 for the visit. Without the negotiated rate from charges $140 for the visit. Without the negotiated rate from your insurance company, the cost will remain $140. For your insurance company, the cost will remain $140. For out-of-network providers and care, the UN insurance covers out-of-network providers and care, the UN insurance covers 80% of reasonable and customary charges after you meet 80% of reasonable and customary charges after you meet your annual deductible. If you have not met your annual your annual deductible. If you have not met your annual deductible, you will pay the full $140. If you have met your deductible, you will pay the full $140. If you have met your annual deductible, the UN insurance will pay $112 and you annual deductible, the UN insurance will pay $112 and you will pay $28. will pay $28.


Calculation of In networkCalculation of In network vs vs

Out of network costOut of network cost

In-Network Out-of-Network

Office visit charge $140 Office visit charge $140

Network discount - $60 Network discount - $0

Contracted office visit rate = $80 = $140

Your PCP copay - $15 You pay - $28

UN insurance pays = $65 UN insurance pays = $112

In this example, for out-of-network expenses, the staff pays 87% more In this example, for out-of-network expenses, the staff pays 87% more and the Plan reimburses 72% more, an additional cost eventually and the Plan reimburses 72% more, an additional cost eventually

passed onto the premium of the following yearpassed onto the premium of the following year


EMPIRE BLUE CROSSEMPIRE BLUE CROSS PPO Plan with in-network and out-of-network benefits PPO Plan with in-network and out-of-network benefits Members pay a copay for medical services received in-networkMembers pay a copay for medical services received in-network Members pay an annual deductible, coinsurance, and out of pocket maximum for Members pay an annual deductible, coinsurance, and out of pocket maximum for

services received out of networkservices received out of network Members pay a 20% co-payment or a maximum of $20 per prescription for drugs.Members pay a 20% co-payment or a maximum of $20 per prescription for drugs.

Effective 1 July 2010:Effective 1 July 2010: CostsCosts

• Projected trend of +11.5%Projected trend of +11.5%• Reduction of administrative fees of 10%Reduction of administrative fees of 10%• Very low reserve of 6 weeks only Very low reserve of 6 weeks only • JNC could not reach an agreementJNC could not reach an agreement• USG DM decided to pursue with a required 10.66% increaseUSG DM decided to pursue with a required 10.66% increase

CoverageCoverage• remove the annual limits on inpatient hospital days and outpatient visits for remove the annual limits on inpatient hospital days and outpatient visits for

mental health and substance abuse servicesmental health and substance abuse services


AETNAAETNA PPO Plan with in-network and out-of-network benefits PPO Plan with in-network and out-of-network benefits Members pay a copay for medical services received in-networkMembers pay a copay for medical services received in-network Members pay an annual deductible, coinsurance, and out of pocket Members pay an annual deductible, coinsurance, and out of pocket

maximum for services received out of networkmaximum for services received out of network Members pay a 20% co-payment or a maximum of $20 per prescription Members pay a 20% co-payment or a maximum of $20 per prescription

for drugs.for drugs.


• Projected trend of +14% adjusted down for a one-time change to POS Projected trend of +14% adjusted down for a one-time change to POS II PlatformII Platform

• Reduction of administrative fees of 5% Reduction of administrative fees of 5% • Substantial reserve of 10 months Substantial reserve of 10 months • JNC agreed on a 4.3% increase + 2 month premium holidayJNC agreed on a 4.3% increase + 2 month premium holiday

CoverageCoverage• remove the annual limits on inpatient hospital days and outpatient remove the annual limits on inpatient hospital days and outpatient

visits for mental health and substance abuse services visits for mental health and substance abuse services • improve the coverage of contraceptive devices improve the coverage of contraceptive devices


HIPHIP HMO Plan with in-network benefits and emergency only out HMO Plan with in-network benefits and emergency only out

of network benefits.of network benefits. Members have no out-of-pocket cost for hospital and Members have no out-of-pocket cost for hospital and

medical services received in-network.medical services received in-network. There is no reimbursement for non-emergency out-of-There is no reimbursement for non-emergency out-of-

network benefits.network benefits. Benefits under HIP include hospital services, physician Benefits under HIP include hospital services, physician

services, behavioural health services, substance abuse services, behavioural health services, substance abuse services, occupational health services, prescription drug, services, occupational health services, prescription drug, vision and other health care benefits.vision and other health care benefits.

Fully insured program. Premiums set by HIP.Fully insured program. Premiums set by HIP.


• Premiums increased by 7.45%Premiums increased by 7.45%


CIGNACIGNA PPO dental plan with in-network and out-of-network benefits PPO dental plan with in-network and out-of-network benefits Members pay nothing for dental services provided by an in-network Members pay nothing for dental services provided by an in-network

dentist.dentist. Members pay an annual deductible and coinsurance of 10% to 30% for Members pay an annual deductible and coinsurance of 10% to 30% for

services received from an out-of-network dentistservices received from an out-of-network dentist CIGNA covers dental services worldwide and benefits include diagnostic, CIGNA covers dental services worldwide and benefits include diagnostic,

preventive, restorative and orthodontic care. preventive, restorative and orthodontic care. Total reimbursements are capped at $2,250 a year. Total reimbursements are capped at $2,250 a year.


• Projected trend of +4% Projected trend of +4% • Reduction of administrative fees of 7% Reduction of administrative fees of 7% • Substantial reserve of 8.5 months Substantial reserve of 8.5 months • JNC agreed on a 6.29% increase + 1 month premium holidayJNC agreed on a 6.29% increase + 1 month premium holiday

CoverageCoverage• add coverage for dental implants in accordance with high number of add coverage for dental implants in accordance with high number of

requests made by health plan satisfaction survey participantsrequests made by health plan satisfaction survey participants


Vanbreda International Vanbreda International (for non-US based staff)(for non-US based staff)

Comprehensive major medical plan Comprehensive major medical plan Members are reimbursed for medical and hospital Members are reimbursed for medical and hospital

treatmenttreatment Members pay a $200 annual deductible and are Members pay a $200 annual deductible and are

reimbursed up to 96 percent for reasonable and reimbursed up to 96 percent for reasonable and customary servicescustomary services

Vanbreda covers medical services for members Vanbreda covers medical services for members residing in all parts of the world except the United residing in all parts of the world except the United States. Yearly reimbursements are capped at States. Yearly reimbursements are capped at $250,000.$250,000.

Effective 1 Jan 2011Effective 1 Jan 2011 Staff survey showed a desire for improved vision, Staff survey showed a desire for improved vision,

dental and hearing aids benefitsdental and hearing aids benefits


Vanbreda International Vanbreda International (short-term contracts)(short-term contracts)

Covers emergency or immediate Covers emergency or immediate medical treatment for staff members medical treatment for staff members onlyonly

Members pay a $100 annual Members pay a $100 annual deductible and are reimbursed 80 deductible and are reimbursed 80 percent of reasonable and customary percent of reasonable and customary fees. fees.

Yearly reimbursements are capped Yearly reimbursements are capped at $30,000.at $30,000.

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Health Insurance BriefingHealth Insurance Briefing22 July 2010 22 July 2010

Q&AQ&A

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health insurance briefing 22 july 2010 changes in the health insurance programmes

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