Open Enrollment (Insurance Benefits)
Open enrollment for insurance will be held August 4th through August 29th. With the announcement of open enrollment came the sticker shock of new premium changes to our members. I want to take this opportunity to explain some of the increases and variables between plans.
First, these changes in insurance premiums are not to be confused with current contract negotiation. These changes are a result of several things including: higher prices for medical service, defensive medicine, and the NEW Patient Protection and Affordable Care Act (PPACA) that provides for a number of new taxes and fees starting in 2014.
The PPACA has had a huge impact on the new rates. These fees include but are not limited to:
- Transitional Reinsurance Fee – this is a fee charged for each member that will fund reinsurance entities that will administer a high-risk pool for the individual market. The fee for 2013 is $63 per member per year, prorated for every month a group extends into 2014 and ending in 2016.
- Health Insurer Fee – this fee subsidizes PPACA costs. It is based on a percentage of premiums and is expected to be between 2% - 4% in 2014 and 2015.
- Patient-Centered Research Institute (PCORI) Fee – the research will evaluate and compare health outcomes of two or more medical treatments and/or services. This fee is charged per member per year.
So, what do these fees mean to our members? It means an additional 1.1 million dollars annually that must be factored into our premium rates. In addition, these fees were not factored into our rates or collected for the 2014 fiscal year. This shortfall results in approximately $800,000 in back fees that also need to be factored into the new premiums.
Earlier this year the other state unions bargained together and a contract was settled in impasse. With this contract came changes in the State Health Plan, as reported by the Lansing State Journal, nearly doubling out-of-pocket medical.
The MSPTA controls the plan design for C.O.P.S. Trust. Members have spoken and are comfortable with the level of benefit the plan provides. With increases like the PPACA fees the only way to keep premiums from increasing would be to cut benefits that effect member services. Examples would include: Increasing office visit copays, increasing prescription fees, and mandating large deductibles. Although these cuts would save money in biweekly premiums, subscribers could easily make up the difference with increased out-of-pocket expenses with each doctor visit.
I like to compare it to car insurance. If you have full coverage with a low deductible your monthly rates are high but you have very little out-of-pocket expenses and don’t hesitate to use the insurance to have repairs made. Now if you switch to No-Fault your monthly premium drops but so does your level of coverage. This also significantly increases out-of-pocket expenses.
Having provided a little background on the factors that influence insurance rates, here are the impacts it will have on open enrollment. C.O.P.S. Trust announced a 15% increase compared to the State Health Plan PPO at 8%. This results in a biweekly deduction INCREASE for C.O.P.S. Trust members at $21.84 for an individual and $60.30 for a full family. Just to clarify, these deductions are in addition to the current premium members are already paying. Even with the variable in premium increases between plans, you will still find C.O.P.S. Trust biweekly deduction to be somewhat less than the State Health Plan.
What to expect starting October of 2014.
- No changes made to the C.O.P.S. Trust Plan.
- A continuation of the current level of benefits under the State Health Plan PPO and HMO for Troopers and Sergeants only.
CHANGES MADE TO THE STATE HEALTH PLAN THAT IMPACT PREMIUM RATES. THESE CHANGES CURRENTLY DO NOT AFFECT TROOPERS AND SERGEANTS.
- Several changes were made to State Health Plan PPO:
- Over a 30% increase in office visit co-payments.
- $2,000.00 increase in out-of-pocket max.
- Over a 30% increase in deductibles.
- Up to 50% increase for prescriptions.
- Several changes were made to the State Health Plan HMO:
- Office visit co-payments doubled.
- $250.00 increase in family deductibles.
- $4,000.00 increase in out-of-pocket max.
To assist members in making decisions during open enrollment new premium rates and outlines of plan benefit for each plan are posted on the MSPTA website under the Open Enrollment tab.