Aetna HealthFund Health Reimbursement Arrangement HRA

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Aetna HealthFund Health Reimbursement
Arrangement (HRA)
2004 Medical Cost Utilization Results
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2004 AHF HRA StudyConsumerism is working

• Low medical cost increase in the first year of
  AHF
• Employer savings are sustained into the second
  year
• Total Replacement Savings of almost 3.5 million
  on 2,850 member group over two years, with a two
  year annualized trend of -2
• Case Study Results
• Seven plan sponsors experience a medical cost
  increase of just 3.3 across all Aetna products
  offered
• Consumerism enhances pharmacy behavior change
• Five plan sponsors with Aetna Rx average 48.5
  generic utilization as compared to 44.7 in PPO
• Greater AHF penetration creates lower medical
  cost trend across all products offered by a plan
  sponsor
• Members with chronic conditions maintain care
  levels
• Members are more aware of the cost of care

Allowed claims, which includes both plan
sponsor and member costs.
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First Year Aetna HealthFund Members2004 results
(9 mos.) show low medical cost increase
Continuously Enrolled Members Allowed claims
Note 12 month continuously enrolled results due
in August
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What Happens in the Second Year to Allowed
Claims?
260
10.3
PPO
240
220
AHF
Allowed Claims PMPM
200
180
8.7
160
140

• Utilization in AHF increased at a lower rate
  than PPO, based on allowed claims
• Reinforces assumption that AHF trend will be 1
  below PPO
• Studies will continue to evaluate AHF trend
  into the third year

Allowed Claims are total claims, eligible for
payment before benefit plan is applied Based
on all AHF members from 18 of 19 plan sponsors in
2003 study one plan sponsor removed due to large
increase in AHF enrollment.
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Drivers of Second-Year Results Lower use of
Inpatient, Lab and PCP drove second year results
Allowed Claims (PMPM) by Cost Category and Change
Since 2003
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Total Replacement SponsorSavings of 3.45
million on 2,850 member group over two years
200 180 160 140 120 100
Expected claims without change from PPO to
AHF Actual claims with AHF
52
Paid Claims PMPM
49
2002 2003 2004

• Two year trend average -2
• 2003 Savings 49 pmpm x 12 mos. X 2,850 members
  1,670,000
• 2004 Savings 52 pmpm x 12 mos. X 2,850 members
  1,780,000
• Total Savings 3,450,000

Based on trend from this plan sponsor from
previous 3 years
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Total Replacement Second year trend is similar to
overall AHF trend after adjustments
Total Replacement
Total Replacement adjusted for high utilization
in 4Q 02
PPO
AHF
AHF
220
2004 13
2003 -10
200
Adj. 2004 10
Adj. 2003 -7
180
Allowed Claims PMPM
160
140
120
100
Spike in claims prior to implementing AHF is
common, especially when plan changes are well
communicated
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Plan Sponsor Case Studies Seven employer groups
Plan Sponsor Case Studies Seven employer groups
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Plan Sponsor Case Study Results Seven employer
groups Two total replacement, five option plans

• Four of the five option plans had somewhat
  younger or healthier members
• Average age difference between AHF and other
  plans varied from 2 5.5 years in four of five
  plan sponsors with lower average age
• AHF had a larger percentage of members with low
  risk scores in three of five plan sponsors
• All experienced excellent financial results
  across all the Aetna products they offered
• From 2003 to 2004, six of the seven groups
  experienced changes in medical cost ranging from
  a decrease of 20 to an increase of 8.1 -- all
  lower than PPO trend.
• Seventh plan sponsor experienced 13 medical cost
  trend, after experiencing a 10 decrease in the
  first year of AHF
• Pharmacy costs also benefit from consumerism
• Not all plans were integrated with medical, but
  all had consumerism features three tier copay
  and/or coinsurance.
• Four of the five employers who offered an Aetna
  pharmacy plan experienced between 3.1 to 5.1
  higher generic utilization than our PPO book of
  business, which had 44.7 generic utilization.
• Employers experience overall better enrollment
  results when fully committed to
• Overall benefit design and contribution strategy
  changes
• Communication, education and leadership engagement

Medical cost indicates allowed claims, both
plan sponsor and member costs.
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Financial Results Snapshot for 63 Plan Sponsors

• Positive financial results were achieved across
  all the Aetna products offered by a broader group
  of 63 plan sponsors who offered AHF
• In their first year with AHF, they experienced an
  average 5.3 increase in medical cost. Best
  results achieved with highest AHF penetration.
• Plan sponsors with 70 or greater AHF penetration
  had a 13.4 decrease in medical cost.
• Plan sponsors with less than 5 AHF penetration
  had a 9.9 increase in medical cost.
• Among 26 who had offered AHF for two years, they
  experienced an average medical cost increase of
  6.5 in the second year.

Medical cost indicates allowed claims,
including both plan sponsor and member costs.
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Preliminary Results on Chronic ConditionsCare
levels maintained (9 month results)

• For continuously enrolled members in their first
  or second year of AHF
• No significant changes in care for members with
  diabetes (833 members) with respect to
• Glycosolated Hemoglobin Tests
• Retinal Eye Exams
• Lipid Screenings
• Microalbumin Tests
• Significant increase in lipid screenings among
  second-year AHF members
• For continuously enrolled members in their first
  or second year of AHF with integrated Rx
• No significant changes in percentage of members
  with cardiac conditions or hypertension (399
  members) taking Ace I/Beta blockers, same or
  higher number of days supply
• No significant changes in percentage of members
  with asthma (570 members) taking Inhaled
  Corticosteroids, Anti-Inflammatories, LRA

Note All statistical testing was completed with
a 90 confidence interval, or p value .1
12 month continuously enrolled results due in
August
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Consumer Use and AwarenessMembers more aware of
cost of care

• 83 of AHF members are more conscious of health
  care costs
• 38 Increase in logons to Aetna Navigator since
  2003 for several large plan sponsors

Aetna Navigator destinations awareness of cost
of care

• EOB Inquiry 29
• HealthFund 33
• Claim Details 132
• Claim Status 53

• DocFind 37
• Contact Us 65

Based on a survey of 800 AHF members All other
data based on Navigator usage statistics for
members from three large plan sponsors offering
AHF
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Fund Utilization50 of employees rollover some
or all of health fund
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Next Steps

• Completed continuously enrolled study, first and
  second year AHF members
• Updated quality of care and preventive care
  analysis
• Next Year What happens in the third year of AHF?
• Next Year What is happening with HSAs?

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Appendix Slides
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Highlights of the 2003 Aetna HealthFund 12-Month
Study

• Lower medical cost increase, applicable to
  first-year AHF members- 3.7 compared to double
  digit PPO plans
• Diabetics continue to seek necessary care,
  relative to comparative populations
• Increases in certain preventive care services
• Reduction in pharmacy scripts and increased
  generic usage
• Increased use of online tools, information, and
  satisfied members

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Plan Sponsor Study 1 National health care
company, offering multiple HRA plans with
integrated pharmacy as lowest cost options to be
on leading edge of consumerism
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Plan Sponsor Study 2 Introduced multiple HRAs
as lowest cost options with integrated Rx to
non-union employees in order to control rising
health care costs, stay competitive in
marketplace and engage employees in health care
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Plan Sponsor Study 3 Introduced HRA as the
highest cost options alongside no copay PPO plans
to achieve full buy-in to consumerism and get
employees to understand cost of care
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Plan Sponsor Study 4 Offered HRA as the least
rich benefit plan offering to introduce CDHP and
eliminate EPO plans
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Plan Sponsor Study 5 Offered HRA as a full
replacement plan to control medical costs and
engage employees in cost of medical care
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Plan Sponsor Study 6 Positioned multiple HRA
plans equal to other plans hoping to gain
substantial AHF enrollment over 3-4 year period
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Plan Sponsor Study 7 Full replacement with two
HRA plans with the intent of reducing benefit
costs
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Communication and Education Strategy
Promote understanding, early acceptance and
participation

• Assess communications capabilities and style
• Develop targeted communications strategy
• Use series of education materials and
  interactive decision-making tools

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• Enrollment
• Contribution Strategy
• Educate
• Emphasize Accountability

• Post Enrollment
• Reinforce
• Remind
• Update

• Re-Enrollment
• Contribution Strategy
• Enhance Awareness
• Reintroduce Resources