February 15, Wisconsin Health News
Group Insurance Board members sent a letter last week to lawmakers, revealing more information on the process they used when deciding to self-fund and regionalize the health plan for state employees.
Their plan, approved last week, would shift the state away from a fully insured model, which involves 18 companies, to a model with six vendors. They estimate the move could save more than $60 million in the 2017-'19 state budget from reduced administrative and insurer risk fees as well as improved discounts. Department of Employee Trust Funds spokesman Mark Lamkins did not provide a further breakdown of the savings.
Any self-insurance contract is subject to approval by the Legislature's Joint Finance Committee.
The board selected Compcare Health Services Insurance Corp. to offer a statewide option as well as a regional option. The other companies serving regions would be Dean Health Plan, HealthPartners Administrators, Network Health Administrative Services, Security Administrative Services and Quartz, which is affiliated with Unity Health Insurance and Gundersen Health Plan.
In a letter sent Friday to JFC co-chairs, GIB Chair Mike Farrell and board member Stacey Rolston, who is a deputy administrator in the Division of Personnel Management at the Department of Administration, wrote that those participating in the state employee health plan will have greater access to providers than are currently available to most members under a proposed move to self-insurance because CompCare has a broader network.
They also wrote that providers that are part of Group Health Cooperative of South Central Wisconsin, which did not respond to an RFP on administering the program, will be included via other third party administrators. In addition, Physicians Plus, which responded to the RFP but wasn't selected as a vendor, is exploring a partnership with Unity and Gundersen, according to the letter.
According to GIB, nine companies responded to the RFP. That also included Mayo Clinic Health Solutions, the self-insurance business unit of Health Traditions Health Plan, which wasn't chosen. WEA Trust also participated in the process and did not receive an offer.
GIB noted that many of the plans with minimal participant enrollment in the program chose not to respond, including Arise, Group Health Cooperative - Eau Claire, MercyCare Health Plans and Medical Associates.
But Patrick Cranley, MercyCare chief operating officer, said GIB's characterization was "a little bit disingenuous."
"We could not respond to the RFP because the RFP required that respondents be able to serve an entire region defined by the RFP," Cranley said. He called it "a conscious decision to limit the number" of plans participating in the state program.
Cranley called the board's decision an "unfortunate choice" for the wider market as it eliminates a number of high quality community health plans from participation in the health plan.
"I think it does long-term damage to the competitive insurance market in the state of Wisconsin," he said. "You're essentially perhaps even crippling some of the plans that are smaller plans that provide important competition in the markets in which they participate."
Cranley said MercyCare serves 1,400 members in Jefferson, Rock and Walworth Counties through the state plan. That's out of 48,000 total members for his plan.
"I would prefer to continue to serve these folks and let them have access to our health plan," he added.
ETF often pursues an "aggressive education campaign" to ensure participants understand their choices under the program, according to the letter. The communication strategy for 2018 "will be unprecedented," Farrell and Rolston wrote.
The board plans to finish contract negotiations by the end of March.
Read the letter.