Benefits in Detail
Each year the Trustees determine deductible
levels for the coming calendar year. Ongoing cost
management initiatives agreed to and implemented
by the Trust meant that for the third consecutive
year there were no changes to deductibles, lifetime
maximums, or out-of-pocket costs for participants
for plan year 2012.
For calendar year 2012, and for participants whose
former employer contributes at the highest rate, annual
deductibles were set at the following amounts:
•
Medicare Indemnity – $1,350
•
Non-Medicare Indemnity – $2,400
•
Non-Medicare In-Network PPO – $745
•
Non-Medicare Out-Of-Network PPO – $2,235
•
Prescription drugs – $650
For participants whose former employer contributes
at a rate below the highest rate, annual deductibles in
2012 were set at the following amounts:
•
Medicare Indemnity – $1,740
•
Non-Medicare Indemnity – $4,500
•
Non-Medicare In-Network PPO – $1,690
•
Non-Medicare Out-Of-Network PPO – $5,070
Factors Affecting
the Trust
High and Rising Medical Costs.
There’s no shortage
of news about the so-called “Silver Tsunami” bearing
down on our nation as the first baby boomers turned
65 in 2011. It’s a reality that has the health care and
insurance industries anticipating how best to serve
the wave of 90 million baby boomers who will require
senior health services.
Already, the United States spends twice as much on
health care as it does on food, according to the McKinsey
Global Institute, and our aging population will certainly
elevate that spend. Other factors that will continue
driving costs upward include inflation, costly high-tech
medical care, increasing use of prescription medications,
and a complex health-care system that falls far short in
delivering care efficiently and consistently.
To illustrate the effect, consider the dramatic health
expenditures in the U.S. which neared $2.6 trillion in
2010. This is over 10 times the $256 billion spent in 1980,
representing well over 17.4% of gross domestic product,
according to the Centers for Medicare and Medicaid
spending. By 2019, the government believes health
care costs will exceed $4.5 trillion, equaling over
19% of the gross domestic product.
Total health care spending reached
more than $2.6 trillion in 2010 – an
average annual cost of nearly $8,000
per person.
Source: Centers for Medicare
and Medicaid Spending
Prescription drug costs continue to command an
ever-increasing portion of our national spending on
health care, reaching nearly $320 billion in 2011. In
just 20 years, from 1988 to 2008, national spending on
prescription drugs increased from $31 billion to $234
billion. Two of the principal factors responsible for this
are increased drug costs and increased utilization.
On a positive note, national prescription drug
spending remained nearly flat in 2011, partially due
to increased use of inexpensive generic medications.
This use continues to climb, hitting 80% of all
prescriptions filled in 2011. The growth of generic
prescription drugs is fueled by patients trying to
save money, and by the start of an avalanche of
blockbuster medicines, many for chronic conditions,
losing patent protection.
5
“Over the next 40 years, one in five
Americans will be 65 or older, and
the 85-plus group will expand to 15
million. Nearly one in three American
workers will be more than 50 by 2012.”
-The Economist, 2011
