PEBB Considers Ideas to Align Benefits More Closely with Private Sector

The Public Employees Benefit Board met Tuesday to hear ideas from consultants to improve the management of its prescription drug benefit and crunch data on emergency department utilization and dental benefits.

Faced with rising prescription drug costs, consultants for the Oregon Public Employees Benefit Board gave its directors a list of recommendations at this month’s meetings that could better align PEBB’s benefits with the private sector.

PEBB Slides Under Cost Caps for Biennium at Negotiation Table

The Public Employees Benefit Board signed off on 2017 premium rates for its menu of health plans, which after extensive negotiation, came in at a 4 percent hike, for an average of 3.2 percent over two years. A Providence researcher also showed the health engagement module is lowering costs for people with more complex medical needs.

Harder-nosed negotiations between the Public Employees Benefit Board and its insurers should allow the health plan for state workers and university employees to meet the budget limits set by the Legislature for the 2015-2017 biennium.

PEBB Reserve Cut in Half After Legislature Raids Fund, Followed By Rising Costs

Three years of below-budget spending by the Public Employees Benefit Board drove the governor and Legislature to take $120 million away from the health benefit plan’s reserve and place it in the state general fund. But now PEBB’s costs have spiked, and the health plan will have to lean on its reserves to pay benefits, cutting the reserve to $159 million in 2018, and possibly draining the fund by 2025.

The Public Employees Benefit Board will have to make do with less than half of their current reserve by 2018 because the Legislature voted at the end of the 2015 session to raid the health plan’s fund of $120 million to cover other expenses in the general fund.

Health Plans Show That Drug Costs Continue Escalating for PEBB

Nine complex biological drugs, all of which lack competition or price controls in the United States, accounted for 19 percent of all spending by Kaiser on PEBB members in 2015. The cost of speciality drugs is increasing 27 percent a year. Meanwhile, the board appointed Mark Fairbanks, chief financial officer of the Oregon Health Authority, its new vice-chairman.

The Public Employee Benefit Board vendors continued to show extreme inflation in the cost of pharmaceutical drugs in reports released Tuesday, a development that could stymie efforts to make healthcare costs sustainable.


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