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Government Employee Health Insurance Costs Rising 6.3 Percent

Sept. 11, 2007 — Though the V.I. government is expected to reap an anticipated $10.2 million in cost savings on its mandatory group health insurance package during fiscal year 2008, government employees will still see a 6.3-percent increase in monthly premiums, experts told senators on Tuesday.
As a result, the total dollar value of the health care plan — including medical, dental and life insurance — will rise from the $100 million package proposed in fiscal year 2007 to $104 million. With the increase factored in, this means premiums paid for medical coverage alone would jump from $88 million to $93 million over the next 12 months, explained Steve Burrows, consultant to the Government Employees Services Commission (GESC)/Health Insurance Board of Trustees.
The impact could have been worse, he added, since representatives from the government's medical insurance carrier, CIGNA, had initially requested a 15.8-percent increase. Though subsequent negotiations brought the figure down to 14.8 percent, several modifications to the benefits structure allowed for a more moderate increase of 6.3 percent, Burrows said.
Last year the government's medical package carried a premium rate increase of 9.3 percent. Without any changes to the current benefit structure, that rate would have escalated to about 18 percent, taking into account economic factors such as inflation and various trends in the insurance industry, explained Health Insurance Board Chairman John Abramson Jr.
While senators expressed concern about some of the proposed benefit changes — which include a 100-percent increase in medical deductibles — the board could have "easily left everything like it was," Abramson said. "We could have come here with something like a 14-percent increase. But could you really stomach that: a 14-percent increase instead of a 6-percent increase with modification? We can't throw the baby out with the bathwater here. This is the best negotiated plan we can offer under the circumstances."
A few senators agreed with Abramson's assessment, and suggested that CIGNA explore the possibility of offering a comprehensive insurance package to private-sector employees. Plans for universal health care coverage have long been in the works, initiated by former Gov. Charles W. Turnbull, but did not come to fruition, as several health insurance representatives and local employers found the proposal problematic.
While CIGNA representatives said they would be open to offering a similar policy to the private sector, they also said the plans would be more expensive than those offered by the government and would only be attractive to limited employer or employee pools.
Though CIGNA did not make a profit with its government plan over the past 12 months, Burrows said, the agency's earnings through the government plan should pick up during FY 2008. Opening up the policies to the private sector now would be less cost effective, he added.
Medical insurance premiums collected through the government plan during FY 2007 totaled $81 million, while $79 million in claims were paid out, according to information provided by CIGNA representatives.
Speaking after Tuesday's meeting, Maureen Venzen, chief of group health insurance, said there would be no premium increase in the government's dental or life insurance policies during the next fiscal year.
Under the government policy, employees pay 35 percent of the insurance premium, while the government kicks in the remaining 65 percent. Premium rates for a combined medical and dental plan are as follows:
Single employee:
Biweekly payment — $216.51
Monthly payment — $433.02
Employee pays $78.75 every two weeks
Employee plus family:
Biweekly payment — $380.89
Monthly payment — $761.26
Employee share is $133.31 every two weeks
Retiree under 65:
Biweekly payment — $216.51
Monthly payment — $433.02
Employee share is $75.78 every two weeks
Retiree under 65 with a family under 65:
Biweekly payment — $387.88
Monthly payment — $775.75
Employee share is $135.76 every two weeks
Retiree over 65:
Biweekly payment — $98.19
Monthly payment — $196.37
Employee share is $34.37 every two weeks
Retiree over 65 with a family over 65:
Biweekly payment — $164.33
Monthly payment — $328.66
Employee share is $57.52 every two weeks
Since Tuesday's meeting was a Committee of the Whole, a final vote was not taken on the proposal, which now has to be sponsored by an individual senator and considered by the full legislative body.
Present on Tuesday were Sens. Liston Davis, Carlton "Ital" Dowe, Juan Figueroa-Serville, Neville James, Norman Jn Baptiste, Louis P. Hill, Shawn-Michael Malone, Terrence "Positive" Nelson, Basil Ottley Jr., Usie R. Richards, Ronald E. Russell, James Weber III, Carmen M. Wesselhoft, Celestino A. White Sr. and Alvin L. Williams.
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Sept. 11, 2007 -- Though the V.I. government is expected to reap an anticipated $10.2 million in cost savings on its mandatory group health insurance package during fiscal year 2008, government employees will still see a 6.3-percent increase in monthly premiums, experts told senators on Tuesday.
As a result, the total dollar value of the health care plan -- including medical, dental and life insurance -- will rise from the $100 million package proposed in fiscal year 2007 to $104 million. With the increase factored in, this means premiums paid for medical coverage alone would jump from $88 million to $93 million over the next 12 months, explained Steve Burrows, consultant to the Government Employees Services Commission (GESC)/Health Insurance Board of Trustees.
The impact could have been worse, he added, since representatives from the government's medical insurance carrier, CIGNA, had initially requested a 15.8-percent increase. Though subsequent negotiations brought the figure down to 14.8 percent, several modifications to the benefits structure allowed for a more moderate increase of 6.3 percent, Burrows said.
Last year the government's medical package carried a premium rate increase of 9.3 percent. Without any changes to the current benefit structure, that rate would have escalated to about 18 percent, taking into account economic factors such as inflation and various trends in the insurance industry, explained Health Insurance Board Chairman John Abramson Jr.
While senators expressed concern about some of the proposed benefit changes -- which include a 100-percent increase in medical deductibles -- the board could have "easily left everything like it was," Abramson said. "We could have come here with something like a 14-percent increase. But could you really stomach that: a 14-percent increase instead of a 6-percent increase with modification? We can't throw the baby out with the bathwater here. This is the best negotiated plan we can offer under the circumstances."
A few senators agreed with Abramson's assessment, and suggested that CIGNA explore the possibility of offering a comprehensive insurance package to private-sector employees. Plans for universal health care coverage have long been in the works, initiated by former Gov. Charles W. Turnbull, but did not come to fruition, as several health insurance representatives and local employers found the proposal problematic.
While CIGNA representatives said they would be open to offering a similar policy to the private sector, they also said the plans would be more expensive than those offered by the government and would only be attractive to limited employer or employee pools.
Though CIGNA did not make a profit with its government plan over the past 12 months, Burrows said, the agency's earnings through the government plan should pick up during FY 2008. Opening up the policies to the private sector now would be less cost effective, he added.
Medical insurance premiums collected through the government plan during FY 2007 totaled $81 million, while $79 million in claims were paid out, according to information provided by CIGNA representatives.
Speaking after Tuesday's meeting, Maureen Venzen, chief of group health insurance, said there would be no premium increase in the government's dental or life insurance policies during the next fiscal year.
Under the government policy, employees pay 35 percent of the insurance premium, while the government kicks in the remaining 65 percent. Premium rates for a combined medical and dental plan are as follows:
Single employee:
Biweekly payment -- $216.51
Monthly payment -- $433.02
Employee pays $78.75 every two weeks
Employee plus family:
Biweekly payment -- $380.89
Monthly payment -- $761.26
Employee share is $133.31 every two weeks
Retiree under 65:
Biweekly payment -- $216.51
Monthly payment -- $433.02
Employee share is $75.78 every two weeks
Retiree under 65 with a family under 65:
Biweekly payment -- $387.88
Monthly payment -- $775.75
Employee share is $135.76 every two weeks
Retiree over 65:
Biweekly payment -- $98.19
Monthly payment -- $196.37
Employee share is $34.37 every two weeks
Retiree over 65 with a family over 65:
Biweekly payment -- $164.33
Monthly payment -- $328.66
Employee share is $57.52 every two weeks
Since Tuesday's meeting was a Committee of the Whole, a final vote was not taken on the proposal, which now has to be sponsored by an individual senator and considered by the full legislative body.
Present on Tuesday were Sens. Liston Davis, Carlton "Ital" Dowe, Juan Figueroa-Serville, Neville James, Norman Jn Baptiste, Louis P. Hill, Shawn-Michael Malone, Terrence "Positive" Nelson, Basil Ottley Jr., Usie R. Richards, Ronald E. Russell, James Weber III, Carmen M. Wesselhoft, Celestino A. White Sr. and Alvin L. Williams.
Back Talk Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.