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Data dashboard: City Plan’s active and early‑retiree pools are financially unsustainable, analysts say
Summary
A dashboard presentation showed active membership in the City Plan has declined ~20% annually and average age rose to ~49; per‑member costs, admissions and high‑cost claims make the active and early‑retiree pools unsustainable unless the board acts on options such as moving early retirees to Medicare pools, closing the active plan or redesigning benefits.
Marina Kolorich, data analytics manager, and Aon Hewitt’s Paige Seifetzler presented a dashboard summarizing City Plan experience through the second quarter of 2013. The presentation identified three structural problems: falling enrollment in the active pool, rising average age among remaining members and high per‑member utilization and pharmacy costs that together make the active and early‑retiree pools difficult to sustain.
Seifetzler said active membership has fallen at roughly a 20 percent annual clip and projected that, if the trend continued, active membership would be below 100 members by February 2015; she noted that of those remaining roughly 70 would be Hetch Hetchy members. "With this declining trend, you also have seen an increase in age, moving from an average age of about 43 years to almost 49 years," she said, adding that those demographic shifts increase per‑member costs.
The dashboard showed the City Plan’s per‑member inpatient and outpatient costs and drug costs are materially higher than the other plans; several high‑cost claims accounted for a large share of the recent inpatient cost increase. Analysts presented three options for the board to consider: 1) move early retirees into the Medicare retiree pool, 2) close the active City Plan to all employees except those outside Kaiser/Blue Shield service areas (for example, small Hetch Hetchy populations), or 3) redesign active‑plan benefits to attract more members while recognizing adverse‑selection risks for other plans.
Commissioners asked staff to return with more detailed cost and population analyses; staff said they will follow up with option specifications and financial modeling for subsequent board consideration.
