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From the May STRS Board
Meeting 2010
The factors that affect health care costs nationwide continue to also affect the STRS Ohio Health
Care Program. At the May Retirement Board meeting, STRS Ohio staff reviewed these factors and their impact on the annual premiums
for each of the plans offered under the STRS Ohio Health Care Program. At the June board meeting, staff will present proposed
premiums for all of its health care plans for calendar year 2011 for the board's approval. This allows staff to review
the claims experience and trends for the first three months of 2010 before making final premium recommendations.
During the May presentation, staff noted that escalating health care premiums, along with accompanying higher out-of-pocket
expenses, remain a national issue. National medical and drug trends continue to outpace the Consumer Price Index (CPI). The
continued introduction of new medical technologies and specialty prescription medications play a significant role in these
trend rates. STRS Ohio plan enrollees' use of services and claims experience also affect their premiums. The claims experience
is particularly high among the non-Medicare Plus and Basic Plan enrollees, as more healthy individuals are not enrolling in
the STRS Ohio program due to the availability of less costly plans in the marketplace. In determining premiums, staff must
also consider changes resulting from the recent federal health care legislation. For example, this legislation capped Medicare
Advantage plan subsidy levels for 2011 at the 2010 levels; yet, medical costs continue to rise. This will mean higher premiums
for STRS Ohio's Aetna Medicare Plan (PPO). Nevertheless, it appears that the Aetna Medicare Plan (PPO) will still be less
expensive than the Medical Mutual Plus Plan in 2011 for Medicare Parts A & B enrollees and will continue to also provide
a savings to the STRS Ohio Health Care Program. The coverage levels and popular features provided by the Aetna Medicare Plan
(PPO) will not change for next year.
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