After going back and forth between insurance companies raising prices and a governor trying to control costs amid declining revenues, the Government Employees Service Commission/Health Insurance Board of Trustees recommended to the Senate on Wednesday a plan lessening premium increases in exchange for new patient fees.
Steve Burrows of Buck Consulting, the board’s consultant, detailed the proposed changes for the senators. He said renewing the existing medical plan with no changes in benefits or charges would cost 22.4 percent – or $29.3 million – more for Fiscal Year 2014 than the $140.9 million the same coverage cost for FY13.
The board put together a plan that would have held cost increases to 15.2 percent, by adding some co-payments and cost sharing, but Gov. John deJongh Jr. rejected the plan, saying the budget could only absorb a 10 percent premium increase. So the board revised their work and voted to recommend a plan that holds cost increases to 10.5 percent, Burrows said.
In-network deductibles for a single person would go from the current $200 to $500 and out-of-network from $600 to $1,000. For families, the in-network deductible would go from $400 to $1,000 and out-of-network from $1,200 to $2,000. Emergency room treatment would have a $50 deductible, while there currently is no deductible. There would also be a $100 hospital co-pay.
"These proposed benefit reductions will cause the plan to lose its grandfathered status under Health Care Reform," Burrows said. "This status has allowed the plan to postpone certain mandated expansions of coverage that will increase plan costs."
The Patient Protection and Affordable Care Act requires non-grandfathered health plans to cover preventive care services with no cost-sharing. Since Aug. 2, 2012, non-grandfathered plans must also provide additional preventive services for women with no cost sharing. That cost has been factored into their financial projections, Burrows said.
GESC recommends covering retirees eligible for Medicare through United HealthCare’s "AARP Medicare Supplement Plan N," which provides "comprehensive benefits but with some out-of-pocket expenses," he said.
Members will be allowed to buy up to have less out-of-pocket expenses by paying about $50 per month. Prescription drug benefits will be provided by United HealthCare under a fully pooled Employer Group Waiver Plan. "This plan will duplicate the current prescription benefits while delivering substantial premium reduction," he said.
Dental insurance premiums will increase by nearly 5 percent from the current $4.4 million price tag.
Senators asked questions, looking for ways to cut the costs to the government without cutting coverage. Division of Personnel Director Kenneth Hermon pointed to wellness programs as a way to cut premium costs by millions of dollars per year. While the savings on insurance and the personal health benefits are both substantial, and despite heavily promoting the program, only 25 percent of government employees are participating so far, he said.
Hermon proposed increasing participation by charging those who don’t participate a $500 fee, deducted from their paychecks.
Several senators questioned GESC and insurance company representatives about the possibility of expanding the government insurance program to allow nongovernment employees to sign up too.
"We could not support this course of action because of the threat that it would pose to the financial stability, comprehensiveness and affordability of the government employees plan," said GESC Board Chairwoman Clemmie Moses. "Any proposal to include the uninsured under the government employees plan is almost certain to result in higher costs and/or reduced benefits for government employees and retirees."
No votes were taken during the information gathering hearing. The Legislature must vote on the recommendation before Sept. 30, when the current plan expires.
