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Medical Savings Accounts
Actual Claims Experience And Charts

Actual Claims Experience

MSA

Employee #1 - 52 year old male (husband/wife coverage)
Total Claims $74,426.07

Employee #2 - 51 year old male (single coverage)
Total Claims $60,453.81

Employee #3 - 38 year old female (family coverage w/ 2 dependents)
Total Claims $44,909.51

TRADITIONAL PLAN

Employee #1 - 39 year old male (family coverage w/4 dependents)
Total Claims $29,841-85

Employee #2 - 61 year old male (husband/wife coverage)
Total Claims $30,715.47

Employee #3 - 45 year old female (husband/wife coverage)
Total Claims $31,138.59

POS

Employee #1 - 44 year old male (single coverage)
Total Claims $86,516.31

Employee #2 - 45 year old female (family coverage w/ 3 dependents)
Total Claims $27,827-54

Employee #3 - 45 year old (family coverage w/ 2 dependents)
Total Claims $11,766.73

Chart One

Jersey City Management Employee Census (1997)

MSA
Employee Only: 49
Employee/Spouse: 25
Employee/Family: 43
Employee/Children: 7
Total: 124 (56 percent)
Traditional
Employee Only: 24
Employee/Spouse: 24
Employee/Family: 13
Employee/Children: 2
Total: 63 (29 percent)
Blue Choice (US)
Employee Only: 6
Employee/Spouse: 3
Employee/Family: 15
Employee/Children: 3
Total: 27 (12 percent)
HMO Blue
Employee Only: 2
Employee/Spouse: 1
Employee/Family: 3
Employee/Children: 1
Total: 7 (3 percent)

85 percent of employees chose either the MSA or traditional indemnity plan options. The MSA was by far the most popular Plan with 56 percent of employees choosing it.

Chart Two

Jersey City's 1998 Health Care Renewal Rates*
Married Couple with Children

Traditional Plan $11,568
Preferred Provider Plan (PPO) $6,702
HMO** NA
Medical Savings Account (MSA)*** $10,571
MSA Savings vs. Traditional Plan$997

* Pricing based on 3 years of actual Jersey City claims experience.
** HMO costs not included since price is not experience-based.
***Cost includes both annual premiums and $1,800 MSA contribution.

Chart Three

Jersey City's 1998 Health Care Renewal Rates*
Married Couple, No Children

Traditional Plan $9,896
Preferred Provider Plan (PPO)$5,760
HMO** NA
Medical Savings Account (MSA)*** $8,773
MSA Savings vs. Traditional Plan$1,123

* Pricing based on 3 years of actual Jersey City claims experience.
** HMO costs not included since price is not experience-based.
*** Cost includes both annual premiums and $1,800 MSA contribution.

Chart Four

Jersey City's 1998 Health Care Renewal Rates*
One-Parent Family

Traditional Plan $6,620
Preferred Provider Plan (PPO) $3,822
HMO** NA
Medical Savings Account (MSA)*** $5,249
MSA Savings vs. Traditional Plan$1,371

* Pricing based on 3 years of actual Jersey City claims experience.
** HMO costs not included since price is not experience-based.
*** Cost includes both annual premiums and $1,800 MSA contribution.

Chart Five

Jersey City's 1998 Health Care Renewal Rates*
Single Individuals

Traditional Plan $4,537
Preferred Provider Plan (PPO) $2,588
HMO** NA
Medical Savings Account (MSA)*** $3,535
MSA Savings vs. Traditional Plan $1,002

* Pricing based on 3 years of actual Jersey City claims experience.
** HMO costs not included since price is not experience-based.
*** Cost includes both annual premiums and $1,400 MSA contribution.

Medical Savings Accounts Do Not Promote Adverse Selection!

Plan Claims ParticipantsAverage AgeAverage ClaimAverage Number Covered
MSA
$637.822
117
42.5
$5,451,48
2.2
Traditional
$437.017
65
42.5
$6,723.33
2.2
POS
$117.748
25
41.5
$4,708.92
2.4
HMO
N/A
8
50
N/A
2.4

MSA vs. Traditional Plan
Out-of-Pocket Net Benefit

(For family of four @ 28 percent tax rate)
Family Medical
Expenses
0
$500
$1000
$1500
$2000
$2500
$3000
Traditional
Plan Cost
0
($260)
($360)
($460)
($560)
($660)
($760)
MSA Cost
+$1296
+$796
+$296
($204)
($704)
($704)
($704)
Net Benefit
$1296
$1056
$656
$256
($144)
($44)
$56

Family Medical
Expenses
$3500
$4000
$4500
$5000
$5500
$6000
$6500
Traditional
Plan Cost
($860)
($960)
($1060)
($1160)
($1260)
($1360)
($1460)
MSA Cost
($704)
($704)
($704)
($704)
($704)
($704)
($704)
Net Benefit
$156
$256
$356
$456
$556
$656
$756

Family Medical
Expenses
$7000
$7500
$8000
$8500
$9000
$9500
$10000
Traditional
Plan Cost
($1560)
($1660)
($1760)
($1800)
($1800)
($1800)
($1800)
MSA Cost
($704)
($704)
($704)
($704)
($704)
($704)
($704)
Net Benefit
$856
$956
$1056
$1096
$1096
$1096
$1096

COMPUTERCRAFT