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Teachers Retirement System System of the State of Kentucky of the State of Kentucky Center for State and Local Government Excellence Summit in Washington, D.C. The Benefits of Group Medicare Advantage October 2, 2017 Gary L. Harbin, CPA

SLIDE 1

System

f the State of Kentucky

Center for State and Local Government Excellence Summit in Washington, D.C.

Gary L. Harbin, CPA

Executive Secretary

Teachers’ Retirement System

f the State of Kentucky

The Benefits of Group Medicare Advantage

October 2, 2017 Jane Cheshire Gilbert, CPA

SLIDE 2

Living Longer With the TRS MEHP—Average Age of 74

MEHP Membership

As of September

2017

As of January

2007 Retired Medicare Members 29,028 16,152 Medicare Spouses/Adult Dependents 4,847 3,529

Total

33,875 19,681

SLIDE 3

Longevity for TRS Retirees

4,800 5,000 5,200 5,400 5,600 5,800 6,000 6,200 2010 2011 2012 2013 2014 2015 2016

5,107 5,276 5,297 5, 535 5,692 5,864 6,072

Retirees Over 80

As of Dec. 31 Age 100 years old or more 48

SLIDE 4

1. Group Medicare Advantage
2. Employer Group Waiver

Prescription Drug Plan

3. Drug Purchasing

Alliance/Know Your Rx Coalition

4. Biosimilar Legislation
5. Shared Responsibility Funding

Taking Control of Health Care Costs – Five Focus Areas

SLIDE 5

Ensuring the Sustainability of Medicare Advantage Retiree Coverage

 19.4 Million Enrollees (34% of all Medicare beneficiaries)  One of every two age-ins to Medicare are enrolling in Medicare

Advantage

 A bipartisan supermajority of Congress opposes any cuts to Medicare

Advantage

 Care coordination has resulted in up to 25% fewer emergency room

visits and 25% fewer inpatient hospital days compared to traditional Medicare

 Continued bending of cost trend for TRS

Teachers’ Retirement System

f the State of Kentucky

115th U.S. Congress Legislative Concerns March/April 2017

SLIDE 6

Moving to a Medicare Advantage National Passive PPO

1964 – 2006 A self-funded Medicare supplement/complement plan January 2007 – June 2010 A full replacement and fully insured Medicare Advantage private-fee-for-service plan July 2010 – January 2015 TRS converted to an insured Medicare Advantage passive local PPO and then regional passive PPO January 2015 – present TRS converted to an insured Medicare Advantage national passive PPO Checking the market led to a full-blown request for proposals, resulting in rate guarantees and rate caps with continued savings and competitive prices through December 31, 2020.

SLIDE 7

Furthermore …

TRS Medicare-eligible retiree receives an average annual pension of $36,000

Replaces Social Security
Worked for lower salaries expecting valuable

benefits such as health insurance at retirement

TRS Medicare-eligible retirees and spouses find group MA to: TRS believes it is important to offer care coordination programs and disease management programs on a voluntarily basis compared to unmanaged original Medicare and Medicare supports the tenets of MA:

Be stable and dependable
Be affordable
Not be limited in provider access —

national passive PPO

Offer value-added benefits
Move away from volume to value
Value-based care via the Stars Rating Program
Coordinated and less fractured care

SLIDE 8

Coverage for a routine hearing exam every

12 months at a $0 copay

A $500 hearing aid allowance every 36 months
Six routine podiatry visits per calendar year
Gift card incentives for Medicare Annual Wellness

Visit and HouseCalls Visit

SilverSneakers

SLIDE 9

(Billions of Dollars)

Liability After

Share of Members & Districts Remaining to State

State’s Liability Reduced

$5 Billion

With Medicare Advantage and Other Changes

Shared Responsibility Results

Liability Before

$6.2 B

Entirely on the State

$3.1B

Eliminated Immediately

$1.9B

$ 1.2B

SLIDE 10

Now, in our 11th year, still saving $27 PPPM compared to our

Medicare supplement/complement projected medical costs for 2007, which equates to $10.7 million annually on Medicare Advantage alone (not including Medicare Part D).

Still Bending the Trend

$210 $232 $260 $274 $288 $315 $283 $278 $285 $342 $289 $270 $290 $290 $240 $260 $252 $258

$0 $50 $100 $150 $200 $250 $300 $350 $400

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

TRS MEHP Premium Chart

Medicare Advantage starts

SLIDE 11

Our Members Come First!

800-618-1687 502-848-8500

https://trs.ky.gov

Teachers’ Retirement System

f the State of Kentucky

System

Center for State and Local Government Excellence Summit in Washington, D.C.

Teachers’ Retirement System

The Benefits of Group Medicare Advantage

October 2, 2017 Jane Cheshire Gilbert, CPA

Living Longer With the TRS MEHP—Average Age of 74

MEHP Membership

Total

Longevity for TRS Retirees

Retirees Over 80

As of Dec. 31 Age 100 years old or more 48

Prescription Drug Plan

Alliance/Know Your Rx Coalition

Taking Control of Health Care Costs – Five Focus Areas

Ensuring the Sustainability of Medicare Advantage Retiree Coverage

 19.4 Million Enrollees (34% of all Medicare beneficiaries)  One of every two age-ins to Medicare are enrolling in Medicare

Advantage

 A bipartisan supermajority of Congress opposes any cuts to Medicare

Advantage

 Care coordination has resulted in up to 25% fewer emergency room

visits and 25% fewer inpatient hospital days compared to traditional Medicare

 Continued bending of cost trend for TRS

Teachers’ Retirement System

Moving to a Medicare Advantage National Passive PPO

Furthermore …

TRS Medicare-eligible retiree receives an average annual pension of $36,000

benefits such as health insurance at retirement

TRS Medicare-eligible retirees and spouses find group MA to: TRS believes it is important to offer care coordination programs and disease management programs on a voluntarily basis compared to unmanaged original Medicare and Medicare supports the tenets of MA:

national passive PPO

12 months at a $0 copay

Visit and HouseCalls Visit

Liability After

State’s Liability Reduced

With Medicare Advantage and Other Changes

Shared Responsibility Results

Liability Before

$6.2 B

$3.1B

Medicare supplement/complement projected medical costs for 2007, which equates to $10.7 million annually on Medicare Advantage alone (not including Medicare Part D).

Still Bending the Trend

TRS MEHP Premium Chart

Our Members Come First!

800-618-1687 502-848-8500

Teachers’ Retirement System

Protecting & Preserving Teachers’ Retirement Benefits