Making Insurance Work Knowing Insurance First 64 th Michigan State AFL-CIO Community Services School May 17, 2016 Nonprofit corporations and independent licensees of the Blue Cross Blue Shield Association

ACA becomes law Grand- fathering Early Retiree Reinsurance Program 180-day Changes 2012 Supreme Court : Individual mandate / Medicaid expansion 2014 Marketplace Individual mandate Medicaid Product rules Rating rules Taxes Supreme Court: Contraceptive coverage mandate 2015 New wellness rules Employer mandate Coverage reporting Supreme Court: Premium tax credit 2016 Wellness finalized SBC rules 2020 Cadillac tax Delayed until 1/1/ ACA Timeline & Overview -2- U of M Dearborn & Blue Cross Blue Shield of Michigan

Employer Health Benefit Survey 2015 Release Slides September 22, 2015

Average Annual Worker and Employer Contributions to Premiums and Total Premiums for Family Coverage, * Estimate is statistically different from estimate for the previous year shown (p<.05). SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, $ 5,791 $6,438* $7,061* $8,003* $9,068* $9,950* $10,880* $11,480* $12,106* $12,680* $13,375* $ 13,770 * $ 15,073 * $ 15,745 * $ 16,351 * $16,834* $17,545*

Cumulative Increases in Health Insurance Premiums, Workers’ Contributions to Premiums, Inflation, and Workers’ Earnings, SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), ; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, (April to April).

* Estimate is statistically different from estimate for the previous year shown (p<.05). SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Percentage of Covered Workers With a General Annual Deductible for Single Coverage,

* Estimate is statistically different from estimate for the previous year shown (p<.05). NOTES: Average general annual deductible is among all covered workers. Workers in plans without a general annual deductible for in-network services are assigned a value of zero. SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Average General Annual Deductible for Covered Workers Enrolled in Single Coverage,

* Estimate is statistically different from estimate for the previous year shown (p<.05). NOTE: These estimates include workers enrolled in HDHP/SOs and other plan types. Average general annual health plan deductibles for PPOs, POS plans, and HDHP/SOs are for in-network services. SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Percentage of Covered Workers Enrolled in a Plan with a General Annual Deductible of $1,000 or More for Single Coverage, By Firm Size,

NOTE: Information was not obtained for POS plans in A portion of the change in plan type enrollment for 2005 is likely attributable to incorporating more recent Census Bureau estimates of the number of state and local government workers and removing federal workers from the weights. See the Survey Design and Methods section from the 2005 Kaiser/HRET Survey of Employer-Sponsored Health Benefits for additional information. SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, ; KPMG Survey of Employer-Sponsored Health Benefits, 1993, 1996; The Health Insurance Association of America (HIAA), Distribution of Health Plan Enrollment for Covered Workers, by Plan Type,

ǂ Firms which offer either “Programs to Help Employees Stop Smoking”, “Programs to Help Employees Lose Weight”, or “Other Lifestyle or Behavioral Coaching“. SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Among Large Firms (200 or More Workers) Offering Health Benefits, Percentage of Firms Offering Incentives for Various Wellness and Health Promotion Activities, 2015 Health Risk Assessments Biometric ScreeningWellness Programs

Among Firms Whose Plan with the Largest Enrollment Covers Specialty Drugs, Percentage of Firms Which Use the Following Strategies to Contain Specialty Drug Cost, by Firm Size, 2015 SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2015.

SOURCE: K aiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group. U.S. health care spending per capita has risen at historically low rates recently, but is expected to pick up Average annual growth rate of health spending per capita for 1970’s – 1990’s; Annual change in actual health spending per capita 2000 – 2013 and projected health spending per capita (2014 – 2024)

What are the recent and forecasted trends in prescription drug spending?

Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) Historical ( ) and Projected ( ) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group (Accessed on December 7, 2015) Note: 2014 to 2015 percent changes are calculated using 2014 and 2015 projected amounts. Growth in prescription spending had slowed, but increased rapidly in 2014 and 2015 Average annual growth rate of prescription drug spending per capita for 1970’s – 1990’s; Annual change in actual prescription drug spending per capita 2000 – 2014 and projected prescription drug spending per capita

Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) Historical ( ) and Projected ( ) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group (Accessed on December 7, 2015) Estimates suggest that Rx drugs will represent a larger portion of overall health spending beginning in 2014 Percent of total health spending that went toward prescription drugs, 2000 – 2014 Percent of projected health spending that is projected to go toward prescription drugs,

Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) Historical ( ) and Projected ( ) data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group (Accessed on December 7, 2015) Out-of-pocket spending on hospital care fell in 2014, but grew for Rx drugs Actual per capita out-of-pocket health spending 2000 – 2014, and projected per capita out-of-pocket health spending (2015 – 2024) on hospitals, physicians and clinics, and retail prescription drugs

Source: Express Scripts 2014 Drug Trend Report and Year in Review. Available at report/ and Costly new specialty drugs are a major driver of increased health spending Express Scripts drug trend by therapy class,

Source: PwC Health Research Institute Since 2010, more specialty drugs have been approved than traditional drugs Number of approved drugs, by therapy class,

Source: Express Scripts 2014 Drug Trend Report Medications for inflammatory conditions and multiple sclerosis topped specialty drug spending in 2014 Express Scripts per-member-per-year spending, top 10 specialty therapy class drugs, 2014

Source: Express Scripts 2014 Drug Trend Report Diabetes medicines topped traditional drug spending in 2014, and were double the second leading category Per-member-per-year spending on top 10 traditional therapy class drugs, 2014

Source: Express Scripts 2014 Drug Trend Report and Year in Review. Available at report/trend-drivers/the-express-scripts-prescription-price-index Generic drug prices have declined while branded drug prices have nearly doubled in price Express Scripts Prescription Price Index

Drugs count for a bigger share of health spending than many think Retail drugs as a share of national health spending and as a share of employer health benefits, 2013 Source: Kaiser Family Foundation analysis of data from the Centers for Medicare and Medicaid Services and Truven Health Analytics

Health Industry Quick Facts Offering of Private Exchanges continues to grow Lowe’s is offering a benefit for employees that provides major surgeries at hospitals for free. Interest in account-based health plans (ABHP’s) have increased interest to help control health care costs Telemedicine (shortage of primary care providers) Growth of retail clinics Minute Clinic (CVS) Healthcare Clinic (Walgreens) The Little Clinic (Kroger) RediClinic (Rite Aid) 23

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Key BCBSM and BCN Changes for 2016

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice  Legislation will keep size groups in Large group status Full Time Equivalents  Retirees covered by the employer do not count toward making group large/small Illustrative Rates will now include PPACA Taxes and Fees. Prior to 2016 Taxes and Fees were indicated on monthly statements as a separate line item. Excise Tax has been delayed for 2018 and 2019 and if no further appeals will take effect in 2020 Self-funding is an option for group size which would keep group Large status GlidePath – BCBSM’s private exchange. Choose from a suite of products…members have additional options and do not have to settle on one plan.

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Health Savings Accounts –  Single deductible is less than $2700 – the two person/full family deductible has to be satisfied even if only one person on contract is utilizing benefits.  Single deductible is $2700 or higher – only the single deductible has to be satisfied if only one person utilizing benefits, full family deductible would have to be met once second individual on contract starts using benefits. Health Reimbursement and Health Savings Accounts – Some menu options show an employer contribution, the amount reflects single contribution only and this is a minimum contribution. Minimum Value Option – Plan can be added even if more than one plan available to members – for instance an employer size of 50 or more can have 3 plans plus add a minimum value option. BCBSM/BCN in partnership with LifeSecure and Dearborn National - is now selling Life, Short & Long Term Disability, Critical Illness, Long Term Care, Hospital Recovery and Accident Insurance 24/7 On-line visits through AmWell – Benefit will be added to BCN fully insured plans. BCBSM fully insured and self funded will have the benefit available to add.

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Opt Outs for Health Insurance

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. States with the Same Largest Employer AK, AL, AZ, FL, GA, IL, KY, LA, MS, MO, MT, NC, OH, OK, SC, TN, TX, VA, WV, WY

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Wal-Mart

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Michigan’s Largest Employer??

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. U of M – Campus and Health System