Feb. 14, 2006 – While everyone at a Health, Hospitals and Human Services committee meeting agreed Monday that universal health care coverage for private sector employees would be a good thing, substantial questions remain on how the current plan on the drawing table would work.
The draft bill, which was first introduced in the Legislature in mid-January, proposed banding together small businesses under a Multiple Employer Trust to be overseen by a trust administrator from the private sector. (See "Testifiers Clash Over Proposed Health Care Bill".) However, at Monday's meeting, concerns were raised about whether Employment and Business Solutions (EBS), which has been contracted by the government to administer trust services has experience in the trust management field.
Questions were also raised about how the program – called the Governor's Health Reform Initiative – would be funded. Jacqueline Hoop-Sinicrope, project manager for the program, said it would be self-funded, and that EBS would set up a trust to fund the program in its beginning stages without local government assistance. Otherwise, the program is set up to sustain itself on participants' monthly premiums, she said.
However, Hoop-Sinicrope also said she anticipated the V.I. Government would have to kick in approximately $4.5 million during the first year of the initiative to help set up a premium assistance program which would provide financial help to employees who are unable to pay their monthly premiums. During the first year, another $1.7 million would be needed "just in case" insurance claims exceeded the amount of premiums paid into the trust.
Other testifiers further stated that the bill was, in large part, drafted without "input or consultation" from groups such as local doctors, hospitals, business owners, employees, and uninsured persons. Attorney Adriane Dudley, who researched various aspects of the plan on behalf of the St. Thomas Chamber of Commerce and the V.I. Medical Society, said Hoop-Sinicrope has not provided any data showing how the plan would positively or adversely affect those groups within the community.
Multiple Employer Trusts, Third Party Administrators, and Funding
Under the proposed plan, employers would team up to buy a core benefits policy for their employees through what's called a multiple employer trust set up by Employment and Business Solutions (EBS). The employers would split the $182 monthly premium with employees. If employees can't afford to pay their share, the government will then kick in to pay one-third of the cost through the Premium Assistance Program.
"Group purchasing agreements like this, while a good idea, have had a history of financial instability," Dudley said during the meeting. "When a Multiple Employer Trust is not tied to an insurance company or health care plan which provides benefits, then there is no way to guarantee that system will remain solvent."
Dudley asked, "Suppose we don't have enough money to pay the insurance claims? What happens then?"
Hoop-Sinicrope did not respond to Dudley's question. Instead, she said that she does anticipate the V.I. Government would have to initially kick in about $6.2 million during the program's first year.
Dudley also said that EBS, the company selected by the V.I. Government to manage the trust, "is a company with no prior experience in the insurance field." However, when asked by Sen. Usie R. Richards why EBS was selected as the trust manager, Hoop-Sinicrope said the company was affiliated with two companies who did have experience in the field – AMS Leasing, and Fringe Benefits Management Company (FBMS) who has been selected as the program's third party administrator.
According to Hoop-Sinicrope, the third party administrator works with EBS to handle insurance claims. However, according to Dudley, both parties seem to have similar duties. "The bill needs to clarify who is performing what functions since general administration, accounting, claims supervision and payment seem to be services both EBS and FBMS are performing," Dudley said.
Service contracts issued by the government for both companies also came under scrutiny during the meeting. Richards was especially concerned when Hoop-Sinicrope said she had included a provision about medical claims reviews in the contract issued to the program's Third Party Administrator.
Richards asked Hoop-Sinicrope how a contract could be issued to FBMS when the bill enabling the program has not even passed through the Legislature.
Hoop-Sinicrope said that a contract has not been awarded to FBMS – instead, she said a memorandum of understanding was drafted for FBMS to provide their services for the program.
Hoop-Sinicrope did not comment when Richards asked how a memorandum of understanding could have been drafted when the bill has not yet passed through the Legislature.
Pre-existing Conditions and Pre-Existing Insurance
Discussion of pre-existing conditions did not get very far during Monday's meeting. Hoop-Sinicrope said pre-existing conditions would be covered in certain instances – specifically in cases involving diabetes and hypertension. However, she explained that in order for pre-existing conditions to be considered, the employee would have to apply for coverage within 90 days after the bill is enacted.
However, under the bill's original language, employers are the ones who would be purchasing insurance for their employees, and would be required to purchase the program's core benefits package.
Attempts to have her clarify this after the meeting were unsuccessful.
Another concern raised by testifiers Monday is that the reduced premium rates offered through the program will not be applicable to businesses which already supply a comprehensive health care package to their employees. "The discriminatory treatment of businesses who already offer insurance is unjust," Dudley said. "Just because they've been providing insurance all along is no reason to exclude them from the benefits coming out of this program."
Hoop-Sinicrope explained that if a business which already offered health insurance coverage to employees wishes to switch to the self-funded plan offered in the bill, then that business would "most likely" have to pay a higher monthly premium than those businesses who were previously uninsured.
Testifiers also offered Hoop-Sinicrope a number of alternative solutions to the proposed health plan, which includes expanding the V.I. Government's current health insurance package with CIGNA to include employees in the private sector.
Dr. Anne Treasure, president of the V.I. Medical Society, also said many government employees are not using the CIGNA plan to cover their children. "We need to educate these parents about what's covered in their plans and get them to include their kids," Treasure said. "We also need to get private sector employees who have insurance to do the same thing. Once that happens, I bet that 90 percent of the uninsured people in the territory will have some sort of a benefits plan."
Wrapping up the meeting, Sen. Craig W. Barshinger, chair of the Health, Hospitals, and Human Services Committee, told testifiers that the Legislature would not vote on the bill until it has been re-worked to take in some of the concerns presented Monday.
Present at Monday's meeting at the Earle B. Ottley Legislative Chamber on St. Thomas were Barshinger, Richards, and Sens. Liston Davis, Adlah "Foncie" Donastorg, Pedro "Pete" Encarnacion, Neville James, Norman Jn Baptiste, Louis P. Hill and Celestino A. White Sr.
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