healthcare benefit cost strategies for 2012

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Strategies & Opportunities to Lower Your Healthcare Costs in 2012 www.nyhart.com Presented by Randy Gomez, FSA Copyright 2011. All Rights Reserved.

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Page 1: 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.

Page 2: Healthcare Benefit Cost Strategies for 2012

Randy Gomez, FSASenior Healthcare Actuary

[email protected]| (317) 845-3595

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

 

Page 3: Healthcare Benefit Cost Strategies for 2012

Agenda Know your plan

Cost Based Strategies

Design Based Strategies

Page 4: Healthcare Benefit Cost Strategies for 2012

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

Page 5: Healthcare Benefit Cost Strategies for 2012

What causes higher medical costs?

Page 6: Healthcare Benefit Cost Strategies for 2012

• 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

Page 7: Healthcare Benefit Cost Strategies for 2012

Evaluation of network discounts

Evaluation of administrative expenses

What is your data telling you?

Raise employee contributions

Cost Based Strategies

Page 8: Healthcare Benefit Cost Strategies for 2012

Network Discounts

Page 9: Healthcare Benefit Cost Strategies for 2012

Administrative Expenses

Page 10: Healthcare Benefit Cost Strategies for 2012

Prescription Drug Contracting

Page 11: Healthcare Benefit Cost Strategies for 2012

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

Page 12: Healthcare Benefit Cost Strategies for 2012

• Benchmark against norms

• Incorporate wellness incentives

• Surcharges for working spouses

• Incremental contributions for multiple options

Raise employee contributions

Page 13: Healthcare Benefit Cost Strategies for 2012

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

Page 14: Healthcare Benefit Cost Strategies for 2012

Plan design

Eligibility

Preventive approaches

Utilization Based Strategies

Page 15: Healthcare Benefit Cost Strategies for 2012

High Deductible Strategies

Page 16: Healthcare Benefit Cost Strategies for 2012

Value Based Strategies

Page 17: Healthcare Benefit Cost Strategies for 2012

Targeted Limitations

Page 18: Healthcare Benefit Cost Strategies for 2012

Eligibility Strategies

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

our plan.”

“Are your dependents really eligible?”

Page 19: Healthcare Benefit Cost Strategies for 2012

Preventive Approaches

Page 20: Healthcare Benefit Cost Strategies for 2012

Onsite Clinics

Page 21: Healthcare Benefit Cost Strategies for 2012

What are your experiences?

Page 22: Healthcare Benefit Cost Strategies for 2012

ANY QUESTIONS?This concludes our discussion

Page 23: Healthcare Benefit Cost Strategies for 2012

Randy Gomez, FSASenior Healthcare Actuary

[email protected]| (317) 845-3595

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

 

Page 24: Healthcare Benefit Cost Strategies for 2012

So Where is the Peak?

Register for upcoming educational events on pensions, 401(k),

healthcare and other actuarial and employee benefits topics at:

www.nyhart.com/events/

Sign up for more webinars

Page 25: Healthcare Benefit Cost Strategies for 2012

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:

• Cash Balance Plan• Defined Benefit & Pension • Defined Contribution & 401(k) • Employee Stock Ownership Plan• Flexible Spending, HRA & HSA • Healthcare Actuarial Consulting

Learn more at www.nyhart.com

Page 26: Healthcare Benefit Cost Strategies for 2012

ACTUARY &EMPLOYEE BENEFITS

16 Actuaries Consulting In 48 States.

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.