healthcare benefit cost strategies for 2012

Strategies & Opportunities to

Lower Your Healthcare Costs in 2012

www.nyhart.com

Presented by Randy Gomez, FSA

Copyright 2011. All Rights Reserved.

Randy Gomez, FSASenior Healthcare Actuary

randy.gomez@nyhart.com| (317) 845-3595

Qualifications or certifications:Enrolled Actuary; Society of Actuaries Fellow; Member of the American Academy of Actuaries. 

Agenda Know your plan

Cost Based Strategies

Design Based Strategies

Know Your Plan

Claims Curve for One Adult

Annual Medical Costs

Probability of Occurring

$0 13.8%

$1 - $3,000 58.0%

$3,000 - $10,000 12.2%

$10,000 - $25,000 10.6%

$25,000 - $50,000 3.6%

+$50,000 1.8%

Average monthly cost is $480

What causes higher medical costs?

• Benchmarking against norms for larger risk pools and the plan’s own history

• Information on cost and clinical outcomes

• Action steps

Best Practices for Ongoing Analytical Services

Evaluation of network discounts

Evaluation of administrative expenses

What is your data telling you?

Raise employee contributions

Cost Based Strategies

Network Discounts

Administrative Expenses

Prescription Drug Contracting

What is your data

telling you?

What do you know about your risk pool?

What happened?

How is your compliance with preventive screenings and medications?

Key questions

• Benchmark against norms

• Incorporate wellness incentives

• Surcharges for working spouses

• Incremental contributions for multiple options

Raise employee contributions

Incremental contributions for multiple options

Traditional Approach

$500 Deductible Option

$1,000 Deductible Option

Monthly cost $600 $570

Employer pays 80% $480 $456

Employee pays balance $120 $114

Incremental Approach

$500 Deductible Option

$1,000 Deductible Option

Monthly cost $600 $570

Employer targets 80% of low cost option $456 $456

Employee pays balance $144 $114

Plan design

Eligibility

Preventive approaches

Utilization Based Strategies

High Deductible Strategies

Value Based Strategies

Targeted Limitations

Eligibility Strategies

“If your spouse has coverage at their job, they are not eligible for

our plan.”

“Are your dependents really eligible?”

Preventive Approaches

Onsite Clinics

What are your experiences?

ANY QUESTIONS?This concludes our discussion

Randy Gomez, FSASenior Healthcare Actuary

randy.gomez@nyhart.com| (317) 845-3595

Qualifications or certifications:Enrolled Actuary; Society of Actuaries Fellow; Member of the American Academy of Actuaries. 

So Where is the Peak?

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ACTUARY &EMPLOYEE BENEFITS

Established in 1943, Nyhart is an ESOP with 84 employees and offices in Indianapolis, Chicago, Atlanta and Kansas City.

Areas of Expertise Include:

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ACTUARY &EMPLOYEE BENEFITS

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Nyhart is one of the nation’s largest independent actuarial and employee benefit firms, consulting to and administering the plans for clients with more than $14 billion in assets.

Our team of benefit advisers deliver personalized analysis and recommendations, translating complex calculations and issues into common language that enables corporations, associations, churches and governments to effectively manage their retirement and health care benefits.