Post on 01-Jan-2016
Understanding the Proposed MI Health Benefits Program
Kate A. Kohn-ParrottOctober 15, 2009
MI Health Benefits is one of many transformational reforms needed to make Michigan viable again
Consolidates the planning, delivery and administration of health benefits for Michigan’s public employees and retirees– Streamlines administrative services
– Leverages economies of scale
– Continues to provide high-quality health benefit programs while managing overall cost
The program is a pro-worker, pro-taxpayer solution
Reinforces the state’s commitment to provide fair and competitive benefits
Engages public employees and public employers in the design of health benefit plans
Preserves collective bargaining Recognizes the importance of investing in
the health of public employees
The program is a pro-worker, pro-taxpayer solution
Gives the public sector a stronger voice in crafting innovative health care programs
Encourages the use of best medical practices
Allows participants to choose the medical providers that best meet their needs
Balances the needs of employees with the responsibility of public employers to spend taxpayer dollars wisely
The program would be available to all public employers in the state
Approximately 400,000 public employees and more than 200,000 retirees could be eligible
“From the local school bus driver to the Governor”
The proposal includes a model for governance and collective bargaining
State AgencySupports Board;
responsible for plan management &
administration; develops and presents plan designs/proposals
L
13-MemberMI Health Benefits Board
Bargaining Unit
PublicEmploye
r
• Board appointed primarily by the Governor, with recommendations from interested groups and constituents
• All board members have an equal voice in the process
• All board members accountable to legislative parameters
• Board designs/approves health care plans that meet diverse needs of public sector with total premiums that satisfy certain financial metrics
• Plans use concepts of value-based insurance design, focus on wellness and prevention, and encourage use of evidence-based care
• Bargaining units and public employers negotiate ono Which plans to accepto Premium shareo Eligibility
Bargaining Unit Negotiations
Importantly, this program will deliver annual savings of $700 million to $900 million
$400 Million - $600 Million
$100 Million –$200 Million
$65 - $75Million
Annual Savings Accrue to All Participating Public Employers
Administrative simplification could save $65 million - $75 million per year by minimizing . . .
Costs paid to purchase administrative services (ASO charges)
Access fees paid to health plans or third-party administrators (TPAs)
Fees paid to brokers, consultants and insurance agents
Internal overhead costs incurred to manage and administer benefit plans
Unparalleled economies of scale will produce annual savings of $100 million - $200 million
Pooling employers that are not currently pooled Increasing the size of existing purchasing pools More effective purchasing of medical services and
supplies, such as prescription drugs Taking maximum advantage of cost-effective plans Shifting fully insured policies to self-insured
coverage Minimizing payment of retention reallocation fees Beyond health care: dental, vision, life, disability
High-quality health benefits will be sustained while saving $400 million - $600 million per year
Adoption of programs that optimize health Managing prescription drug utilization Employing value-based insurance design
protocols Compliance with best-practices in the delivery
of medical care Availability and use of “clinical advocates” Simplified claims processing Attacking fraud
Dispelling the myths
Myth: This program will reduce benefits and increase cost sharing
Fact: The proposal recognizes the value of investing in employee health and providing fair, competitive benefit programs while controlling cost– Employees or their representatives will have a voice in
designing the benefit programs and offerings– Lower overall cost translates to lower employee cost– Helps retain jobs and benefits
Dispelling the myths
Myth: Destroys collective bargaining
Fact: Preserves collective bargaining on the selection of plans to be offered, premium cost share and eligibility; retains union voice in benefit plan design while changing the way benefit plan design is bargained for some
Dispelling the myths
Myth: Medical provider selection will be limited
Fact: Given the size of the program, it is expected that most medical providers will opt to participate; employees will select the health care providers that best meet their needs
Dispelling the myths
Myth: Value of pooling maxes out at 20,000 participants
Fact: There are two kinds of pooling: purchasing pooling and risk pooling– The leverage from purchasing pooling continues to grow
as the size of the pool increases– While the value of risk pooling maxes out when the
demographics of the pool emulate the general population– The MI Health Benefits Program will gain most of its
economies from purchasing pooling
Dispelling the myths
Myth: Michigan should wait to see what happens on Capitol Hill
Fact: The federal plan will focus on coverage for the un- and under insured while retaining employer-based health care– MI Health Benefits Program is an employer
program– Employers will still be expected to provide and pay
for health care benefits for their employees– Michigan cannot wait any longer to take action
Dispelling the myths
Myth: Puts state government between patients and their doctors; mandates use of “clinical advocates” with wide-ranging powers
Fact: Nothing could be further from the truth– Clinical advocates work ONLY for the patient,
ensuring the correct diagnosis and regimen of care– Clinical advocates make recommendations--they do
not approve or reject treatment plans– HIPAA protects employee medical data
Dispelling the myths
Myth: The state can’t compete with private insurance companies
Fact: The state is not trying to compete with private insurance carriers– Rather, the state, in concert with the MI
Health Benefits Program Board, will determine the available health plans and will then contract with private insurers to negotiate discounts and process claims
Dispelling the myths
Myth: The program will limit competition
Fact: Once the plan designs are finalized, a competitive Request for Pricing (RPF) process will take place– All carriers and third-party administrators
(TPAs) will have an equal and fair chance to bid on the business
– Competition will remain an important factor in managing costs going forward
False information (more myths) on the streets of Lansing . . . and elsewhere?
Public employers with lower cost can opt-out of the program
It’s an employer program . . . not a government-run plan
The program will generate savings . . . not increase financial liability
Communicating the correct message . . . understanding the facts
PRESCRIPTION FOR SUCCESS
Michigan
Health
Benefits
Program
TAXPAYER SAVINGS
$700 Million -$900 Million
per Year
For more information
www.newideasformichigan.org