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We continue to face a challenging environment for both the state budget and control ling health care costs. Unknown Affordable Care Act changes, anticipated personal income tax decreases, and sluggish sales tax revenue may affect state and municipal revenues. At the same time, rising health care costs are crowding out other critical needs, including public safety and local aid. The state’s health care increase benchmark under Chapter 224 is 3.6% annually, and this has been hard to achieve with rising costs. Yes, an aging population and mandates are contributing to rising costs, but the two main drivers are:
According to the Massachusetts Center for Health Information and Analysis (CHIA), 80.3% of 2014 hospital commercial payments went to the most expensive Massachusetts hospitals. The GIC’s members are also using the most expensive hospitals, with 46% of utilization in one of our largest broad network plans using Tier 3 — the most expensive — hospitals.
The GIC’s winter 2017 For Your Benefit newsletter outlined many of the reasons for skyrocketing prescription drug costs. The Health Policy Commission reported in the fall that prescription drug costs rose 8.8% from 2014-2015 and now represent 17.2% of total Massachusetts medical expenditures.
The GIC’s initial premium requests from the plans came in at 10.2% — clearly unaffordable for the state, municipalities, and members. The Commission knew that it would be able to negotiate down from this somewhat, but other changes would be needed to come in within the state’s benchmark of 3.6%. Guiding principles were to:
In line with the third goal, the GIC is renegotiating our contract with CVS Caremark and continues the Centered Care Initiative to encourage our health plans to move from fee-for-service provider contracts to global budgets. The GIC’s Clinical Performance Improvement (CPI) Initiative that analyses 155 million de-identified claims on nationally recognized measures of quality and/or cost efficiency will continue for Fallon Health, Health New England, Neighborhood Health Plan and the UniCare State Indemnity Plan. Members of these plans pay the lowest copay for the highest-performing specialists:
***Tier 1 (excellent)
**Tier 2 (good)
*Tier 3 (standard)
Harvard Pilgrim Health Plan and Tufts Health Plan will also tier providers to encourage members to shop for their care.
In a major initiative, the GIC has proposed legislation as part of the Governor’s budget to cap payments to hospitals, doctors, and other providers for GIC members.
Additional benefit changes were also needed. Some of our broad network plans were spending well beyond other similar plans. These plans include Fallon Health Select Care, which proposed a 9.4% increase; Harvard Pilgrim Independence, which proposed a 6.1% increase after two consecutive years of increases exceeding 9.0%; and Tufts Health Plan Navigator, which proposed a 12.9% increase. As a result, these plans are closed to new members. This change and others are outlined on the next few pages.
Take Action to Lower Your Out-of-Pocket Costs
Take Advantage of Annual Enrollment
It’s more important than ever to review your health plan options during this year’s Annual Enrollment. Be sure to follow the Gather, Investigate and Choose and watch the Annual Enrollment video. If you are in a plan with a high premium, it’s important to take the opportunity to consider enrolling in a less expensive plan. The health plan in which you are currently enrolled may or may not be the best value for you and your family for the next fiscal year.
M-F 8:45 a.m.-5 p.m.