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Agenda Item
ASR
Control 22-000610 |
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MEETING DATE: |
07/19/22 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
All Districts |
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SUBMITTING
Agency/Department: |
County Executive Office (Approved) |
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Department contact
person(s): |
Kim Derrick (714) 834-2564 |
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Robin Gurien (714) 834-7114 |
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Subject: 2023 Retiree Insured HMO and
PPO Health Plan Rates
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ceo CONCUR |
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Clerk of the Board |
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Concur |
Approved Agreement to Form |
Discussion |
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3 Votes Board Majority |
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Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 3/8/2022
#9, 7/13/2021 #23, 1/12/2021 #18, 7/14/2020 #28 |
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RECOMMENDED ACTION(S):
Adopt the 2023 Retiree Insured HMO and PPO Health Plan Rates.
SUMMARY:
Adopting the retiree health plan rates for 2023 will allow
the County to continue to offer benefits to eligible County of Orange retirees.
BACKGROUND INFORMATION:
Human Resource Services (HRS) currently administers eight insured HMO and PPO retiree health plans with Blue Cross of California dba Anthem Blue Cross (Anthem), Kaiser Foundation Health Plan (Kaiser) and SCAN Health Plan (SCAN). Attachment A contains the recommended rates for these retiree health plans for the 2023 plan year. Rates for these plans are negotiated annually during the term of the agreement.
Rate Development
The 2023 rate changes for the insured retiree health plans vary from a decrease of 5.86 percent to an increase of 9 percent depending upon the specific health plan and coverage tier elected by the retirees. The rate changes are as follows:
Kaiser HMO and Kaiser Senior Advantage HMO Plans
Kaiser provides the Kaiser HMO Plan for non-Medicare retirees and dependents and the Kaiser Senior Advantage HMO Plan for retirees and dependents with Medicare Part A and B or Medicare Part B only.
Non-Medicare Retirees
The Kaiser rates for non-Medicare retirees will increase by 6.84 percent. This group is relatively small with approximately 424 retirees. Due to their small size the County’s experience is pooled with Kaiser’s book of business and this group is based on a blend of manual rates, demographics and experience (30 percent experience and 70 percent manual rates).
Medicare-eligible Retirees
Kaiser rates for Medicare eligible retirees will decrease by 5.86 percent. This plan is rated on a mixture of community rates based on Kaiser’s group Medicare experience, County-specific risk adjustment factors and changes in enrollment.
Kaiser Medicare rates must be approved by Centers for Medicare and Medicaid Services (CMS) and are preliminary when approved by your Honorable Board. The 2023 rates are preliminary.
Mixed Enrollment Retirees
The Kaiser rates for retirees with mixed enrollment, meaning one participant with Medicare and one without Medicare, will decrease from .5 percent to 5.86 percent depending on the retiree coverage tier.
Anthem
Anthem offers two HMO plans for non-Medicare retirees, one HMO and two PPO Medicare Advantage plans for Medicare A and B eligible retirees and two HMO plans for Medicare Part B only eligible retirees.
The Anthem health plans do not have sufficient enrollment for the 2023 rates to be based solely on County utilization experience. The non-Medicare retirees are manually rated based upon Anthem’s book of business.
Anthem’s renewal includes a $25,000 communications credit. In consideration of the County renewal for 2023 rather than conducting a Request for Proposal (RFP), Anthem is providing a $50 monthly grocery credit to post 65 retirees.
Non-Medicare Retirees
The rate changes for the Anthem health plans for non-Medicare retirees are listed below. The rate increases are driven by medical trend. Enrollment in these plans is relatively small and rates are subject to year-to-year fluctuations.
Mercer’s negotiations with Anthem on our behalf reduced the rate increase from 20 percent to 9 percent.
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Plan |
(Increase ) % |
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Anthem Traditional HMO |
9.0% |
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Anthem Select HMO |
9.0% |
Medicare-eligible Retirees
The rate changes for Retirees enrolled in Medicare are listed below. Anthem rates for the Medicare HMO and PPO plans are based on medical plan cost (claims plus administration), which are offset by Centers for Medicare and Medicaid Services (CMS) reimbursements for providing medical plan coverage to Medicare retirees. Mercer negotiated the estimated CMS reimbursement to reduce the increases in the rates.
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Plan |
(increase) % |
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Anthem Preferred Custom PPO |
1.0% |
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Anthem Preferred Standard PPO |
1.4% |
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Anthem Senior Secure HMO |
0% |
Mixed Enrollment Retirees
The Anthem rates for retirees with mixed enrollment, meaning one participant with Medicare and one without Medicare, will vary depending on the retiree coverage tier.
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Plan |
(Increase ) % |
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Anthem Traditional HMO and Preferred Custom PPO Plans |
6.4% to 7.8% |
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Anthem Traditional HMO and Senior Secure HMO Plans |
7.0% to 8.2% |
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Anthem Select HMO and Medicare Senior Secure HMO Plans |
5.9% to 7.5% |
SCAN
SCAN is a Medicare Advantage plan for Retirees with Medicare Parts A and B. SCAN does not have sufficient enrollment to base the renewal on the County retiree claim experience. Therefore, SCAN’s rate is based on their overall increase in medical and pharmacy trends of all their group plans. Mercer negotiated the rates to decrease them by 4.1 percent. In consideration of the County renewal for 2023 rather than conducting a RFP, SCAN is providing a $3,000 Wellness credit.
Prior Board Actions
On March 8, 2022, the Board approved the 2023 Retiree Insured HMO and PPO Health Plans effective January 1, 2023.
On July 13, 2021, the Board approved the 2022 Retiree Insured HMO and PPO Health Plan rates effective January 1, 2022.
On January 12, 2021, the Board approved the 2021 Retiree Insured HMO and PPO Health Plans effective January 1, 2022.
On July 14, 2020, the Board approved the 2021 Retiree Insured HMO and PPO Health Plan rates effective January 1, 2021.
FINANCIAL IMPACT:
Retiree Health Plan costs are fully reimbursed by the participating retiree, with contributions toward the premium made pursuant to the Fourth Amended and Restated County of Orange Retiree Medical Plan (which provides a "grant amount" based on years of service and other eligibility criteria and plan terms) adopted in 1993, as amended.
The Retiree Medical Grant amount is increasing 3 percent to $25.37 per Retiree Medical Year of Service. The increase is based upon the average of the increases and/or decreases of all County Retirees for the upcoming year. The average change in the Grant may not exceed three percent per year.
Appropriations for the retiree plans are incorporated in Fund 290 FY 2022-23 Budget and will be included in future fiscal year budgets.
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A - 2023 Retiree Insured Health Plan Rate Tables