Ryan Holderman: Explanation of STRS Health Care Plan availability and thoughts on HC premiums

From Ryan Holderman, June 24, 2008
Subject: Explanation of STRS Health Care Plan availability

Dear One & All:

Here is the response from STRS to my query about the disparity between the premiums of the self-insured Health Care Plans (Aetna & Medical Mutual) and the fully-insured plans (AultCare, Kaiser & Paramount).

It appears that those retirees in the northeastern portion of the State are indeed fortunate to have access the the fully-insured plans.

Later,
Ryan

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The current methodology used by the Board provides enrollees with the same amount of subsidy dollars based on years of service and requires a minimum monthly premium of $40. In 2009, non-Medicare plan enrollees who enroll in the Plus Plans or fully insured plans receive $620 in a monthly subsidy. The difference in the premiums is established by taking the total monthly cost of the plan minus the $620. Different premiums therefore represent the difference in the cost of the plans.
There are a few regional plans in Ohio that have established niche markets with doctors and hospitals creating a cost-efficient health delivery system that can offer lower premiums for eligible participants. Most new fully insured plans are not interested in high-cost enrollee groups unless a certain number of lives are guaranteed. Since STRS Ohio members have a choice each year to select a new plan, STRS Ohio is unable to guarantee enrollment numbers.

STRS Ohio is working with the other retirement systems on a bid for the hospital-medical plans. These new contracts would be effective Jan. 1, 2010.

Beth M. Coffey
Member Resolution Liaison
(614) 227-4031 - direct
(888) 227-7877 - toll-free
(614) 227-5216 - fax
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From Ryan Holderman, June 22, 2008
Subject: Thoughts on STRS Health Care premiums

Dear One & All:

I've just sent you six E-mails containing the 2009 STRS health care premiums for all the options offered by our retirement system. In going over those figures, I noticed great disparity between the self insured programs, which are primarily the only ones available to a large number of retirees in middle and southern Ohio (both East and West) and the fully insured programs which are primarily only available to retirees in northeastern Ohio. You can study the charts and see for yourself.

I will use just one example...a 30 year STRS retiree without Medicare who has a spouse and dependent children. Here are the figures for 2009:

Aetna Plus Plan

...Benefit Recipient: $294 (up from $235 in 2008)

...Spouse: $838 (up from $717 in 2008)

...Dependent Children: $224 ea. (up from $209 in 2008)

Medical Mutual Plus Plan

...Benefit Recipient: $207 (up from $181 in 2008)

...Spouse: $760 (up from $669 in 2008)

...Dependent Children: $224 ea. (up from $209 in 2008)

Aetna Basic Plan

...Benefit Recipient: $145 (same as 2008)

...Spouse: $505 (up from $388 in 2008)

...Dependent Children: $135 ea. (up from $130 in 2008)

Medical Mutual Basic Plan

...Benefit Recipient: $111 (same as 2008)

...Spouse: $457 (up from $362 in 2008)

...Dependent Children: $135 ea. (up from $130 in 2008)

AultCare

...Benefit Recipient: $40 (down from $47 in 2008)

...Spouse: $588 (up from $490 in 2008)

...Dependent Children: $185 ea. (up from $172 in 2008)

Kaiser Commercial HMO

...Benefit Recipient: $60 (down from $103 in 2008)

...Spouse: $625 (up from $536 in 2008)

...Dependent Children: $197 ea. (up from $187 in 2008)

Paramount Commercial HMO

...Benefit Recipient: $115 (up from $113 in 2008)

...Spouse: $685 (up from $580 in 2008)

...Dependent Children: $219 ea. (up from $196 in 2008)

With all the major hospitals, etc. in Columbus, Dayton, and Cincinnati, it would seem that STRS ought to be able to negotiate a fully insured program for STRS retirees who live in the areas not covered by the present fully insured providers.

I have never heard an explanation of why this disparity exists and what could be done to correct the situation. Perhaps it's time for the STRS Board to open discussions about this matter and pursue a solution to the problem.

Sincerely,
Ryan Holderman