Teachers Retirement System System of the State of Kentucky of the - PowerPoint PPT Presentation

Teachers’ Retirement System System of the State of Kentucky of the State of Kentucky Center for State and Local Government Excellence Summit in Washington, D.C. The Benefits of Group Medicare Advantage October 2, 2017 Gary L. Harbin, CPA Jane Cheshire Gilbert, CPA Executive Secretary

Living Longer With the TRS MEHP—Average Age of 74 As of As of MEHP Membership September January 2017 2007 Retired Medicare Members 29,028 16,152 Medicare Spouses/Adult Dependents 4,847 3,529 Total 33,875 19,681 2 2

Longevity for TRS Retirees Retirees Over 80 As of Dec. 31 6,200 6,000 6,072 5,800 5,864 5,600 5,692 5,400 5, 535 5,200 5,297 5,276 5,107 5,000 4,800 2010 2011 2012 2013 2014 2015 2016 Age 100 years old or more 48 3

Taking Control of Health Care Costs – Five Focus Areas 1. Group Medicare Advantage 2. Employer Group Waiver Prescription Drug Plan 3. Drug Purchasing Alliance/Know Your Rx Coalition 4. Biosimilar Legislation 5. Shared Responsibility Funding 4

Teachers’ Retirement System of the State of Kentucky 115 th U.S. Congress Legislative Concerns March/April 2017 Ensuring the Sustainability of Medicare Advantage Retiree Coverage  19.4 Million Enrollees (34% of all Medicare beneficiaries)  One of every two age-ins to Medicare are enrolling in Medicare Advantage  A bipartisan supermajority of Congress opposes any cuts to Medicare Advantage  Care coordination has resulted in up to 25% fewer emergency room visits and 25% fewer inpatient hospital days compared to traditional Medicare  Continued bending of cost trend for TRS 5

Moving to a Medicare Advantage National Passive PPO A self-funded Medicare 1964 – 2006 supplement/complement plan January 2007 – June A full replacement and fully insured Medicare 2010 Advantage private-fee-for-service plan July 2010 – January TRS converted to an insured Medicare 2015 Advantage passive local PPO and then regional passive PPO January 2015 – present TRS converted to an insured Medicare Advantage national passive PPO Checking the market led to a full-blown request for proposals, resulting in rate guarantees and rate caps with continued savings and competitive prices through December 31, 2020. 6

Furthermore … TRS Medicare-eligible Replaces Social Security  retiree receives an Worked for lower salaries expecting valuable  average annual benefits such as health insurance at retirement pension of $36,000 Be stable and dependable  TRS Medicare-eligible Be affordable  retirees and Not be limited in provider access —  spouses find group MA to: national passive PPO Offer value-added benefits  TRS believes it is important to offer care coordination programs and disease management programs on a voluntarily basis compared to unmanaged original Medicare and Medicare supports the tenets of MA: Move away from volume to value  Value-based care via the Stars Rating Program  Coordinated and less fractured care  7

Coverage for a routine hearing exam every  12 months at a $0 copay A $500 hearing aid allowance every 36 months  Six routine podiatry visits per calendar year  Gift card incentives for Medicare Annual Wellness  Visit and HouseCalls Visit SilverSneakers  8

Shared Responsibility Results State’s Liability Liability Liability Reduced After Before $ 5 Billion (Billions of Dollars) $3.1B With Medicare Eliminated $ 6.2 B Immediately Advantage and Entirely on Other Changes the State $ 1.9B Share of Members & Districts Remaining $ 1.2B to State 9

TRS MEHP Premium Chart $400 Medicare Advantage starts $342 $350 $315 $290 $290 $289 $260 $274 $288 $283 $278 $285 $300 $270 $260 $252 $258 $240 $232 $250 $210 $200 $150 $100 $50 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Still Bending the Trend  Now, in our 11th year, still saving $27 PPPM compared to our Medicare supplement/complement projected medical costs for 2007, which equates to $10.7 million annually on Medicare Advantage alone (not including Medicare Part D). 10

Teachers’ Retirement System of the State of Kentucky Our Members Come First! 800-618-1687 502-848-8500 https://trs.ky.gov Protecting & Preserving Teachers’ Retirement Benefits 11