DPSOA Meets with ERS to Discuss Possible Plan Changes

DPSOA attended a meeting on Wednesday of this week at ERS where the financial status of the insurance fund and possible changes to the plan were discussed.  I asked John Pike to prepare the following summary, and I encourage you to consider attending one of ERS’s regional briefings if you are interested in getting additional information.
Brian Hawthorne, DPSOA President

DPSOA was invited by the Employees Retirement System of Texas (ERS) to attend a small group briefing on the Texas employees group benefits program financial status and plan design change recommendations. ERS staff intend to take their recommendations for changing health care benefits to the ERS Board of Trustees at a May 25th meeting.  The meeting was called and conducted by Ann Fuelberg, the Executive Director of ERS. Attending for DPSOA were Board Members Gary Chandler and Mark Proveaux as well as our Legislative Consultant Larry McGinnis and our Executive Director John Pike.  Other state agencies and associations were in attendance including Texas Public Employees Association.

Ms. Fuelberg began her presentation by reviewing the $140.4 million shortfall that ERS is forecasting for FY 2011 based on current plan design, funding level, and the plan benefit cost trend. ERS has been using its contingency fund in an attempt to balance the program, but a shrinking contingency fund can only cover a small portion of the shortfall. At this rate, remaining $112 million in the contingency fund will be exhausted. The  plan’s cost benefit trend has leveled off at 9%, with almost half of the plan costs coming from hospital stays.

Ms. Fuelberg also discussed the recent Plan Benefit Survey of its members which had more than 45,000 completed surveys submitted from a good demographic cross section of the ERS members.  ERS also held three focus group discussions with 41 participants.  From this feedback, some of ERS’s findings included that members were willing to accept small increases in fees, slightly increased copays, and changes based on years of service. On the other hand, they do not want to pay more for specialist care, hospitalization and emergency rooms, nor name brand drugs.  ERS also determined that the members are less willing to use smaller hospital networks nor to increase the years of service from 10 to 20 to qualify for retiree insurance.

Below are some of the employee group benefit plan changes that ERS staff will recommend to the Board of Trustees for adoption at next month’s meeting:

ERS Staff Recommendations
To the ERS Board of Trustees

      Current  – Proposed

Copays:
 Health Select    $20/$30  –  $25/$40
 HMO     $30/$40  –  $25/$40

 In-Patient Hospital   $100/day-$500 max –  $150/day-$750 max
 Out-Patient    $100/day  –  $100/day (no change)
 Emergency Room    $100   –  $150
 
Prescription Drugs: 
 Generic     $10   –  $15
 Name Brand    $25   –  $35
 Non-Preferred    $40   –  $60

20% Co-Insurance:
 In-Network    $1,000   –  $2,000
 Out-of-Network    $3,000   –  $7,000
 Out-of-Area    $1,000   –  $3,000

Other Changes:
 High Tech Imaging/care    $100 Copay
 (CT Scans, MRI, Nuclear Med.)
 Urgent Care Facilities   $50 Copay

Limit on annual visits and lower allowable charges for chiropractic care.

Ability to buy more than 30-day supply of maintenance drugs at participating pharmacies with no retail maintenance fees.

Many of the above proposals serve the dual purpose of reducing the costs to the plan and encouraging members to utilize more cost efficient healthcare practices (primary care providers, generic drugs, outpatient facilities, etc.). Ms. Fuelberg also pointed out that ERS posts their annual review of cost containment and fraud on their website as well as recommendations for cost effective care providers (http://www.ers.state.tx.us/insurance/default.aspx).  

Finally, Ms. Fuelberg stated that it was her intention to do her best to minimize the burden on the members for filling this shortfall.  The final decisions regarding plan changes will be up to the ERS Board of Trustees.  ERS has planned a series of update briefings between now and the May 25 Board meeting.  If you would like additional information, make plans to attend one of the regional briefings (see attached schedule).