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Great-West Healthcare Climbs Ladder in Business Insurance Ranking of CDHC Leaders

Posted on: Thursday, 28 September 2006, 12:02 CDT

Great-West Healthcare, a national employee benefits provider, captured the seventh position in Business Insurance magazine's annual ranking of the largest consumer-driven health care (CDHC) providers. Great-West Healthcare moved up three places from 10th in 2004. The rankings are based on the number of total covered lives at employer clients in 2005; Great-West Healthcare reported approximately 116,000 at the time of the survey. The carrier's CDHC portfolio of employer health plans accounted for nearly 7.3 percent of its enrollment as of Jan. 1, 2006. This is more than double the industry average of 3.3 percent1.

"Great-West Healthcare is proud to have made such tremendous progress in advancing our leadership position in consumer-driven health care," said Marc Neely, vice president of sales, mid and select markets, Great-West Healthcare. "We are pleased to offer our customers a variety of CDHC plans, as well as the sound information they need as they consider these plans. For the remainder of 2006 and into 2007, we will continue to sustain our focus and commitment to helping brokers and their employer clients navigate the many options they have to control benefits costs."

The carrier's CDHC plans include a consumer-driven PPO called Great-West Healthcare Consumer AdvantageSM, a health savings account (HSA) and a health reimbursement account (HRA). Launched in 2004, Great-West Healthcare Consumer Advantage is a tiered-benefit plan designed to cover preventive and critical care at a high level and engage members on discretionary services. The plan begins with a PPO design that employees easily understand, including deductibles, copays and coinsurance. The plan takes a three-tiered approach that distinguishes among preventive, catastrophic and routine or scheduled services.

For the second consecutive year, a study by Reden & Anders Ltd., an outside consulting firm, verified that employers using Great-West Healthcare Consumer Advantage enjoyed an average 5.6 percent decrease in members' use of medical services versus expected use under traditional PPOs.2

Lower plan use helps hold down claims costs, and this contributes to lower average claims costs under Great-West Healthcare Consumer Advantage. According to 2006 pricing data from the carrier's book of business, a Great-West Healthcare Consumer Advantage client can expect claims cost reductions of 11 to 18 percent versus a traditional PPO plan. Deeper claims cost savings of 14 to 21 percent are possible for employers that choose a leaner pharmacy benefits plan as well.3

Great-West Healthcare's HSA is a tax-favored employee savings account coupled with qualified high-deductible health plans. Employees and employers can make annual tax-free contributions, up to certain limits, and the funds may be used without tax penalty to pay for qualified medical expenses. Unused monies grow tax-free and roll over from year to year and from job to job.

The HRA is an employer-funded, tax-sheltered spending account that reimburses employees for qualified medical care expenses. Employers contribute a pre-determined amount of money for employees to pay for eligible medical expenses and help offset out-of-pocket costs. At the end of the year, any unused HRA funds may roll over into the following year (subject to the employer's choice of plan design).

Informative, consultative CDHC tools

In addition to experiencing healthy CDHC membership growth in 2005, Great-West Healthcare published a new magazine devoted to CDHC. Trailblazer is a timely source of information that helps chief executives, benefits professionals, brokers and consultants explore emerging health care trends and chart strategic direction. The newsstand-quality magazine presents alternative viewpoints and information on significant issues relating to employee health care. For a hard copy of Trailblazer, please send an e-mail to trailblazermagazine@gwl.com and include contact name and address.

Great-West Healthcare also created a new consultative tool that aids brokers and employers in making benefits choices. With the Is Your Company Ready for CDHC? tool, employers answer a series of 21 questions in five categories -- company readiness, employee readiness, financial considerations, benefits philosophy and plan design. Results are tabulated and an overall CDHC readiness score is given. For employers with high readiness scores, the tool identifies the CDHC plan type best suited for each company. Final results, including answers to questions, may be printed. The tool is accessible at www.greatwesthealthcare.com, under the Test Your CDHC Readiness section.

About Great-West Healthcare

Great-West Healthcare, a division of Great-West Life & Annuity Insurance Company, is a national employee benefits provider with expertise in self-funding and health care management solutions. Nationally, the division operates a health care network that includes more than 4,250 hospitals and 550,000 providers and provides health care services to 2 million people. Visit www.greatwesthealthcare.com for more information.

Great-West Life & Annuity Insurance Company, headquartered in metro-Denver, serves its customers through a full range of health care plans, life and disability insurance, annuities, and retirement savings products and services. It is an indirect, wholly owned subsidiary of Great-West Lifeco Inc. and a member of the Power Financial Corporation group of companies. Great-West Life & Annuity Insurance Company is not licensed to do business in New York. Products are sold in New York by its subsidiary First Great-West Life & Annuity Insurance Company, White Plains, N.Y.

1 Industry CDH enrollment percentage calculated based on figures from Jan. 27, 2006 Inside Consumer Directed Care and August 2005 ChapterHouse Healthcare Market Outlook.

2 The study was conducted with employers who previously offered a Great-West Healthcare PPO to employees and then fully replaced the PPO with Great-West Healthcare Consumer Advantage. Claims data from March 2003 to September 2005 was used for the analysis.

3 2006 Great-West Healthcare pricing data across all groups that will switch from a Great-West Healthcare PPO to Great-West Healthcare Consumer Advantage.

Source: Business Wire

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