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SENATE APPROVES INSURANCE PLAN AMID PROTESTS

Sept. 29, 2003 – With their backs to the wall, senators approved the government's new health insurance plan on Monday in a special session called by Gov. Charles W. Turnbull on Friday for that purpose.
They also approved the administration proposal to exempt the two insurance providers from a 5 percent premium tax that is supposed to go into the Insurance Guaranty Fund as a hedge against company defaults.
The cost of medical coverage is increasing by 7.14 percent, while that of dental coverage is going down about 6 percent. However, dental coverage is far less costly, and overall the cost of the government employees' insurance program is rising by $5 million — to $73 million from $68 million.
The lawmakers saw the plan for the first time Monday morning and read the documentation provided while in session, with no opportunity for study or analysis before a vote. Two years ago, when the Turnbull administration presented its insurance plan for ratification, the Senate was given two days to look it over — and protested that as being inadequate.
The senators were irate on Monday. Sen. Lorraine Berry said: "This is unfair to again put us behind the eight ball to approve a plan costing millions of dollars, and we have one day to analyze it."
Several senators asked if they could hold the plan for a 30-day analysis. The answer was a definite "no" from representatives of the two insurance companies, Cigna Healthcare and Met Life. The current policies expire at midnight Tuesday and cannot be extended, both said.
In 2000, however, the government did enter into a 90-day extension with Blue Cross/Blue Shield in anticipation of renegotiating a contract for the next year.
On Monday, Sen. Usie Richards asked legislative legal counsel Yvonne Tharpes if the Health Insurance Board of the Government Employees Services Commission by law could extend the life of the existing contract. No, she replied. As of Oct. 1, "it's expired."
Further, Tharpes said, the law is "ambiguous" about when the contracts have to be presented to the Legislature. It states "not more than 60 days before" the expiration date, she said.
Insurance board counsel Paul Pacquin said the statute refers to when the contracts must be entered into, not when they should be presented to the Legislature.
Calls for changing the law
Throughout the day, senators repeatedly called for new legislation to prevent a recurrence of such last-minute pressures.
Sen. Louis Hill said one definition of insanity is doing the same thing over and over again and expecting different results. "How are we going to ensure this doesn't happen next time?" he asked his colleagues.
"Would you look at this as blind loyalty then?" Sen. Roosevelt David asked, wondering how he could approve something with out adequate time to analyze it.
Paulette Rabsatt, the insurance board chair, apologized repeatedly for the delay, calling the board's presence on Monday "bittersweet."
"We would have preferred not to be in almost the same situation we were in two years ago," she said. Negotiations between the board, its consultant and the insurance carriers were prolonged, she said.
On July 31, Rabsatt said, Cigna proposed an increase of 13.94 percent. And that renewal rate, she said, was contingent upon the board agreeing to execute a "premium stabilization reserve" that would allow Cigna to access funds in the government's existing premium stabilization fund, as well as amounts estimated to be credited to that account from a surplus position for the plan year ending Sept. 30, 2003.
In other words, Rabsatt said later, "in essence, we had to buy the rate down with the reserves we have in order to keep the out-of-pocket cost to the employees at a minimum."
"The government health insurance has not been reconciled since 1998," Sen. Shaun-Michael Malone charged. "Some people who have died are still being paid."
Basis for calculations questioned
Sen. Louis Hill took issue with the fee basis. "Our fees are based on those of Washington, D.C., the highest in the nation," he said. "Why?"
Hill said Puerto Rico's insurance rates are among the lowest in the nation and asked why the V.I. rate wasn't modeled after those. Willoughby Lewis, owner of V.I. Employee Benefits Consultants, the firm that bid successfully for the contract to serve as consultant to the insurance board, offered this reply: "It's hard to determine."
Hill asked Jay White, the Cigna representative, how the company figures its rates, challenging the use of the federal district as a basis for the Virgin Islands. White said Cigna had based its rates on information obtained from Blue Cross/Blue Shield, the government's previous insurer.
Sen. Ronald Russell challenged the 5 percent premium tax, saying it is a conflict in law. "The premium taxes were paid in lieu of gross receipts tax. It's a defective law," he said.
Russell and Hill both asked if the carriers now must pay gross receipts tax. Tharpes said not, because what the administration proposed was an exemption from the tax, not its repeal.
The waiver of the 5 percent tax significantly affects the insurance rates under the new contract. Without the waiver, an employee's bi-weekly contribution would increased by $4.35; with the waiver it will increase by $1.58.
Rabsatt said improvements to the MetLife dental coverage include elimination of the $25 deductible on preventive diagnostic services, an increase in the annual maximum to $1,250 from $1,000, and an overall increase in the benefit paid for diagnostic and preventative services. Later, when asked why the dental plan costs were reduced, she said the ratio of claims to premiums had improved.
Early in the session, Sen. Celestino A. White Sr. successfully motioned to bring representatives of labor unions and retirees into the session. Jones had opposed the idea because, he said, "We cannot legislate or amend anything on these contracts — we can only vote them up or down."
Vernelle de Lagarde, St. Thomas-St. John Federation of Teachers president, and Luis "Tito" Morales, Central Labor Council president, both expressed concerns about the short notice.
De Lagarde criticized the rushed nature of the proceedings. Morales said the Legislature would continue to be "under the gun" if the senators do not change the law regarding the submitting of health-care packages.
The insurance measure was approved on an 11-2 vote with two senators absent. Sens. Richards and White voted no. Sens. Norman Jn Baptiste and Russell were absent for the vote.
The 5 percent premium tax exemption passed on a 12-1 vote with Sen. Adlah "Foncie" Donastorg casting the lone "no" vote. Sens. Jn Baptiste and Russell also were absent for this vote.

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