Text Box:    The HBEC developed several options and asked the State’s health insurance consultants to evaluate the financial and claims impact of each proposal. After consideration of the various options and the likely consequence of each variation, the committee recommended moving from a co-pay system (employees paid either $5 or $10 for a 30-day prescription, depending on whether they purchased a generic or brand name drug) to a coinsurance plan.  Under the new plan, employees pay 20% of the cost of a generic or brand name drug at the local pharmacy.   The minimum amount an employee will pay for each prescription or refill will be $8 and the maximum will be $50.   The annual out-of-pocket maximum will be $1,000 for an individual and $2,000 for a family.  The mail order plan will continue to use co-pays and they will increase from $0 to $8 for generics and from $2 to $20 for brand name drugs. This was the first change to the prescription drug co-pays since 1989.  Aetna estimated this change to contain prescription drug costs reduced the necessary FY04 premium by about $8 per employee per month.    Cost Shifting Prevention Other health plans (including health trusts managed by several State of Alaska bargaining units) have adopted plan options that allow participants to select “employee only” or minimal levels of coverage when insurance is available through a spouse.  This has the effect of shifting otherwise covered expenses from one plan to another.     This issue arose when one of the trusts proposed allowing their members to select ‘employee only’ coverage and a ‘limited’ family coverage option providing only 20% coverage up to $50,000 in claims; uncovered claims could then be shifted to the spouse’s health plan.  Text Box: The Health Benefits Evaluation Committee (HBEC) meets throughout the year to review the Select Benefits health plan claims experience, evaluate trends, consider options, and recommend specific changes to the Commissioner of Administration.  The HBEC is an advisory group comprised of administration managers and union representatives of the Supervisory, Confidential, and Corrections bargaining units. Miki Cole and Lee Powelson currently serve as the CEA members of the HBEC.    The committee is advisory; the Commissioner of Administration has the final authority to determine benefit levels and the monthly premium.  During FY03 the committee focused its attention on two Text Box: main areas: containing prescription drug costs and exploring ways to prevent other insurance plans from shifting health care costs to Select Benefits.    Prescription Drug Cost Containment The inflation rate for prescription drugs exceeds that for other medical services.  The committee considered, and later discarded, a proposal to require the use of generic drugs when a chemical equivalent is available to replace a name brand drug.  Although mandatory use of generic drugs would result in substantial savings, the HBEC decided to offer economic incentives to promote generic drug use rather than interfere in the medical decisions of doctors and their patients. Text Box: Winds of Change come to Select Benefits….Lee Powelson Text Box: Confidential Employees Association Text Box: Volume 1, Issue 1 Text Box:   Text Box: Inside this issue: CEAText Box: CEA Board Members   Kim Petersen, President Judy Porter, Vice President Nicki Neal, Treasurer Nancy Hopson, Secretary Edra Morledge, M.A.L. Aaron Gelston, M.A.L. Vicki Tomal, M.A.L  

 Alaska Public Employees Association/AFT Web Site

 

Page 1     Page 2     Page 3     Page4



 

 

 

Winds of Change Cont.

2,3

Contract Extension

3,4

HR Community News

5