By law, the MPSERS (Michigan Public School Employees’ Retirement System) Board has total authority to determine the health insurance benefit granted to retired school employees. The board has established a plan of initiatives using cost avoidance, cost reduction and cost sharing to keep the high quality and affordability for both the retirees and the school districts. The master health care plan is a self-funded plan, which means that the school districts pay ALL of the expenses in the plan.
The board reviews the costs and plan design every year and determines if and where changes need to be made. In 2007, NO changes were made. The plan design was identical to that of 2006. This year the board has determined to make the necessary changes for a two-year period, and in 2008 will be making the changes for 2010; that way retirees will know nearly a year in advance what the changes will be for the coming year.
2008 changes
Even with the successes of the Medicare Modernization Act, the savings from those programs are not available at the same level in 2008.
Medical updates
Cost avoidance: continue the care management program.
Cost reduction: expand PPO network, effective April 1, 2008 –
- occupational and physical therapy network will be expanded.
- the same 20% coinsurance will be applied out-of-state when members have access to, but do not select, PPO providers.
Cost sharing: encourage consumerism; simplify plan design –
- 10% in-network coinsurance will apply to all settings of care, effectiveApril 1, 2008; EXCEPT home health, hospice, and programs with unique discount arrangements (inpatient services apply).
- retain the low $500 coinsurance maximum, but based on an individual; retiree $500, retire and spouse $1,000; effective January 1, 2008.
Pharmacy updates, all effective April 1, 2008
Cost avoidance: step therapy; a process in which the use of a recognized first line drug such as an OTC (over-the-counter) or generic is used before a more complex drug –
- program works with pharmacies and physicians at the point of sale.
- system automatically reviews drug history to determine if the patient has tried less costly first line drug therapy.
- pharmacist works with physician to interchange drug when appropriate.
Cost avoidance: prior authorization; establish specific pre-defined criteria that must be satisfied before a prescription can be dispensed –
- program works with pharmacies and physicians at the point of sale.
- pharmacist, physician and BCBSM work together to ensure health risks are minimized and patients receive appropriate medications.
Cost reduction: therapeutic interchange program –
- transition members from high cost brand name drugs to therapeutically equivalent generic and OTC options.
- program works with physicians to identify individuals whose drug therapy can be successfully interchanged to reduce member and plan costs.
Cost sharing: inflationary adjustment –
- copayment maximum – $34 retail, $85 mail order.
2009 changes
Cost avoidance: continue the care management program.
Cost sharing: pharmacy copayment maximum; $36 retail, $90 mail order.