Two years ago, in negotiations with employee organizations, the County made important modifications to the co-pays in the Aetna plan in an effort to reduce long-term premium increases. Despite these changes, the Aetna premium increase for 2005 is 22%. The two primary reasons for this increase are unexpected catastrophic claims (similar to the Blue Shield experience) and their contracting agreements with individual providers instead of medical associations. Regarding catastrophic claims, a total of 14 individuals had atypically high expenses. Total medical catastrophic costs for these types of individuals increased by 47.7%. The average amount per individual increase by 58.3%. Regarding contracting, Aetna concedes that their individual (rather than association) contractual agreements are making it difficult to effectively control premium increases.
This year, the County and Aetna are collaborating on several strategies to address these issues. First, the County and Aetna will introduce a “Simple Steps” program which focuses on high risk individuals with multiple diseases (e.g. diabetes, cardiovascular disease). Although Aetna normally charges an additional amount for this program, they have agreed to offer it at no cost to the County in a mutual effort to control long term costs more effectively. We anticipate implementing this program in January, 2005. Additionally, Aetna is entering into new contractual agreements with hospitals and physician providers to reduce overall cost to employers.
Aetna is being recommended for continuation without a formal request for proposal process because they:
• Offered the best proposal for coverage and cost in 2001 in response to a Request for Proposal process and
• No new options have arisen which would represent less cost and less disruption of patient-physician relationships.
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