Secure Horizons is being recommended for continuation without a formal request for proposal process because:
• They were initially selected in a Labor-Management-Retiree Request for Proposal process,
• No new options have arisen which would represent comparable design, less costs or less disruption of patient-physician relationships and
• Secure Horizons has implemented back-to-back premium reductions in the last two years.
The premium decrease for retirees age 65 and over is 8.83% due primarily to the implementation of Medicare Part D effective January 1, 2006. Under this new program Medicare will reimburse a portion of prescription drug costs, reducing the cost for employers. Employers have two main options. They may “integrate” the coverage provided by Medicare with their current coverage, allowing health plans to receive reimbursement and pass savings along to employers through premium reductions. Alternatively, employers must obtain annual actuarial assessments of costs and apply direct to the Centers for Medicare and Medicaid Services (CMMS) to obtain a maximum reimbursement of 28%. Health plans have been analyzing the comparative savings under both options and concluded that the integration provides more direct savings to employers and involves less administrative expense.
Because of the requirement that Health Plans secure CMMS approval for their integration of benefits, all health plans anticipate a delay in being able to get contracts to employers. For this reason, we are requesting Board approval of the renewal of agreements and authorization for the Employee and Public Services Director to sign amendments upon approval by County Counsel.
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