When employers move from Original Medicare and secondary coverage to full-replacement Group Medicare Advantage benefits, they may reduce their per-member monthly costs. That means appreciable annual savings and reduced FASB and GASB liability.
Here's an example from a Humana customer who moved from a self-insured secondary plan to Humana Medicare Advantage.
"Corporation Y" is one of the biggest energy providing companies in the Midwest. It's a large company of about 1,500 Medicare eligible retirees, with a high employer contribution to the premium – averaging more than 75 percent.
The company previously offered a self-insured Medicare secondary plan – most recently an exclusion plan with a $250 deductible and no maximum out-of-pocket. Their prescription drug plan had complete coverage of generic and brand through the coverage gap. In 2009, their claims experience was $122 for medical and $193 for prescription drugs, on average, per member per month.
Had they continued with those benefits, the 2011 working rate was estimated at $361 per member per month (estimated without administrative costs). By switching to a custom Humana Group Medicare PPO plan with custom Rx benefit, they reduced their premiums by about $81 per member per month. Assuming all eligible members enrolled, that puts annual savings at more than $1.4 million a year.
With Humana Group Medicare PPO:
- Estimated per member per month savings = $81
- Potential annual savings = $1,458,000
Find out how much you could help your clients save
| |
Previous Plan |
Humana Plan Effective 01/01/2011 |
| Medical Coverage |
Self-insured exclusion COB plan |
Custom PPO |
| Prescription Drug Coverage |
"Complete" Rx plan |
Custom "Complete" Rx |
| 2011 Premium (Per member, per month) |
$361* estimated without administrative costs |
$280 |
While this case study gives a good example of potential savings, actual savings vary by employer. Humana's actuarial staff can create a model specific to your clients by using their claims data.
Humana provides real solutions to improve your clients' bottom lines, deliver a better healthcare experience, and enrich the lives of retirees. Call your sales representative to find out more.
For general inquiries please contact Humana by e-mailing us at GroupMedicareSales@humana.com or calling 800-788-0506 ext. 6365.
