Claims

1. For the first time in at least a decade, Maricopa Community College claims match the premiums paid. These numbers do not take administrative costs into account. Once those costs are factored in, BCBS spends more money paying Maricopa Community College members' claims and administering our account than we pay BCBS in premiums.

2. Medical costs paid per contract per month by BCBS over the last six months of the year 2000:
   1. In-patient Facilities $83.11
   2. Out-patient Facilities $36.38
   3. Physician Services $129.80
   4. Prescription Drugs $ 61.83
   5. Totals $311.12

3. The District BCBS health insurance premium is based solely on the claims experience. In other words, the more claims we make, the more we cost, the more we pay in premiums.

Rate Increases

1. The Maricopa Community Colleges were anticipating an increase in premium of twelve percent for the 2001-2002 fiscal year. At the beginning of the year, EBAC presented a proposal to the Governing Board that would minimize the impact of the increase on employees. The Governing Board approved this proposal. Most of the increase will be paid by the District and the Cigna Reserve Fund, with the additional increase in cost being passed on to District employees. Due to legislative changes additional costs are expected for the future. Most health insurance companies in Arizona are raising rates an additional four to five percent over and above previously planned increases. BCBS has raised our cost for the next fiscal year an additional four and one half percent. The Governing Board agreed to cover the increase of four and one half percent.

2. The total premium increase for next year is sixteen and one half percent.

Comparable Coverage

1. In general, the type of plan provided by the District is comparable to other large companies also insured with BCBS of Arizona. However, BCBS officials have indicated that more companies are beginning to move toward higher co-pays for both office visits and prescription drugs, and increasing the amount paid by the employee in the event of hospitalization.

1. To keep costs down the District has several options. Some of these options are as follows:
   1. Change to the BCBS standard prescription drug plan with the following co-pays
      $7 generic
      $20 preferred brand
      $40 non-preferred brand
   2. Change in-patient deductible from no cost to the employee to $500.00
   3. Change in-patient cost for services from no cost to the employee to thirty percent of the BCBS allowable costs

2. The EBAC representatives are committed to finding the best way to manage these increases in health insurance premiums. Thank you for responding to the surveys we have been sending out (results will soon be sent out District wide to MAT employees), and please let us know what comments or concerns you may have.