A first look at 2024 SHBP rate renewals

Health Benefits Report 

Well, here we go again.… July 12, 2023, started the process in determining rates for the SHBP in 2024, and while the outlook is not as dismal as in 2023, it is certainly not what I would want. AON, the state’s actuary, made a presentation that was comprehensive and certainly showed that, except for a few areas, the blame here lies strictly on the shoulders of the vendors and their inability to control costs.

Just using examples from the local government presentation, the number of visits decreased by 2 percent to providers. Concerning is the fact that primary care visits are down 5 percent and specialist visits are up 1 percent. The average cost per visit increased by 5 percent. Highlighted was that cardiovascular cost per visit was up by 37 percent and physical therapy was up by 11 percent a visit. Outpatient service visits were down by 10 percent, but the cost per visit was up by 27 percent.

Prescription drugs seem to be on a path that will drive our rates even higher year after year. The increase across the board over
last year is approximately 15 percent. Cancer drugs were up 23 percent and drugs for inflammatory conditions, such as Humira
and Stelara, are up 22 percent. The weight loss/diabetes drugs are one of the biggest increases, up by 19 percent; Wegovy and
Saxenda are up 67 percent alone. When you consider the cost at about $1,300 a month and the premium for a family is $400-$500
a month for prescriptions, something has to give.

Lastly, you will see that the local government is higher than state government. The main reason for that is that 3 percent (2 percent last year) was added to the premiums to rebuild the claims stabilization reserve. Also, 1 percent was added to the premiums on the local side to account for adverse selection (all of the towns that left the SHBP). Obviously, these do not affect the state employees, as there is neither a claims stabilization reserve fund nor the ability to leave the SHBP for state employees.

This year’s report shows more than ever that we need to take away the third-party administrator’s and the pharmacy benefit
manager’s ability to set prices for the medical services and prescription drugs that we consume. They have failed miserably, and
until they are held accountable, they will continue to take money out of your paychecks and pensions.

I will report back to you if there is any progress on changes.