NEW MEXICO PUBLIC SCHOOLS INSURANCE AUTHORITY

1. NEW MEXICO PUBLIC SCHOOLS INSURANCE AUTHORITY Roswell Independent School District

2. Why the Plan Changes? • (a) NMPSIA doesn’t care about its members • (b) NMPSIA loathes 89% member satisfaction • (c) NMPSIA staff pocketed the extra millions • (d) Bernie Madoff made us do it • (e) NMPSIA’s reserves are depleted & claim costs are up

3. Why the Plan Changes? • Self – Insured Coverage • Excess Fund Balance went from $25 million on April 30, 2008 to negative $2 million on March 30, 2009 • No Premium Increases allowed in FY10 legislative budget process

4. Why the Plan Changes?

5. Premiums October 2009 Blue Cross Medical: No Change Presbyterian Medical: No Change UCCI Dental: No Change Davis Vision: No Change The Standard Life: No Change The Standard Disability: No Change

6. JULY 1ST PLAN CURRENT PLAN No Choice But To Downsize

7. July 1, 2009 Program Guide • New Introduction (Executive Director’s Letter) • New Employer Plan Matrix • Expanded Rules and Regulations Summary • New Summary of Benefits High & Low Options • New Prescription Drug Summary • New Davis Vision Summary

8. July 1, 2009 Program Guide • Copay - The predictable fixed dollar amounts you pay for certain services. • Deductible - The amount you pay for health care before the PPO begins to pay • Coinsurance - The percentage of covered charges you pay after you meet the deductible • Out-of-Pocket Maximum – The maximum amount you pay for covered services in a calendar year. (Charges above the maximum allowable fees do not apply to the out-of-pocket maximum.)

9. Worst Case Scenario to meet Out of Pocket *This amount may be less if copays were also paid

10. Brief summary of benefits

11. The Bucket List • Deductible Bucket • Out of Pocket Bucket Copays DON’T go in the deductible bucket Neither do non-allowed charges Deductible, coinsurance, and copays go in the out-of-pocket bucket

12. Non-Allowed Charges Charges which are: • Not Covered, or • In Excess of Plan’s Allowable Amount when going out of network (balance billing)

13. Balance Billing Applies to Out of Network Charges Charge $1,000 Allowed $ 800 Balance $ 200 $200 does not go to deductible. Member is 100% responsible for this amount

14. High Option benefit example* An example of what the member’s responsibility could be for a medical office visit including lab and radiological services once the deductible has been met.

15. High Option benefit example* A member obtains a routine physical and associated testing. Later in the year, the member suffers an injury requiring an emergency room visit. The member also sees their PPP, which includes associated lab test and a high-tech radiology test (MRI). These tests show a need for surgery, a brief hospitalization, and short-term physical therapy.

16. Prescription Plan Changes • Drug Firms' Spending on Consumer Ads Fell 8% in '08, a Rare Marketing Pullback - - spending on such ads reached a high of $4.8 billion in 2007, compared with less than $1 billion in 1997 • Third tier (non-formulary) still covered, but member will pay 70% of discounted price • Formulary at nmpsia.com or catalystrx.com

17. Prescription Plan Change Lunesta or Ambien CR for insomnia 70% of Discounted Price is $54. Member pays $54. Generic for Ambien (zolpidem tartrate) another sleep aid, would cost member $2.

18. Other Non-Formulary Examples Celebrex $48 naproxen $2 Vytorin $70 Zetia + simvastatin $35 Cozaar $35 Diovan $17 Aciphex $116 omeprazole $2

19. Davis Vision Changes • Occupational Eyeware option (safety or VDT glasses) • Contact lens discount of 15% for amounts over allowable • Lens 123 offers 50% savings on replacement contact lenses

20. In Closing . . . • Any More Questions? • Comments? • Thanks!