Latest GIC plan for premiums 'kind of unheard of'

BOSTON — About half of the more than 430,000 people covered by Group Insurance Commission plans will see a decrease in their premiums in fiscal 2019 and, on average, there will be no increase in premiums, GIC Executive Director Roberta Herman said Thursday.

"This is kind of unheard of," Herman told the GIC board Thursday. She said, "This is not something that you should expect to see year after year."

The commission provides health coverage to state and municipal employees, covering 436,000 people with a budget of over $2 billion.

The GIC had a goal of premiums increasing by 2 percent in fiscal 2019, and health care costs generally increase annually. The market indicated the GIC could see increases of 6 to 9 percent in fiscal 2019, according to the GIC.

"It's all going up, so all of the game has been trying to not go up so much," Herman said.

Health care is a big budget item to begin with, so increases can have a dramatic effect on other spending priorities.

Open enrollment for the GIC begins April 4. At the last meeting, the commission unanimously voted on medical plan design changes that the commission said would reduce deductibles across regional and limited network plans "where possible" and reduce some co-payments for specialists.

Some enrollees will see an increase in premiums. Those enrolled in Tufts Medicare Preferred will see a year-over-year increase of 10.3 percent on July 1, according to Herman. Elderly retirees in Pool 2 will also see increases.

The cost avoidance was wrung out of the same procurement process that caused so much consternation last month when the GIC cut three insurers from its portfolio. After an outcry from union leaders and lawmakers, the GIC backtracked on that proposal, which had been designed to render cost savings.

Going out to the market netted some savings even without dropping insurers, as did the GIC's decision to take over control of pharmacy benefits management, and so did its decision to make the whole system self-insured so that the government bears the risk and insurance companies handle the administration, according to Herman. The state was previously partially self-insured, Herman said.

"Everything was a little this, a little that. Pharmacy was a little carved-in, a little carved-out. Self-insurance was a little self-insured, a little fully insured. And behavioral health was a little carved-out, a little carved-in," Herman told reporters after Thursday's meeting. "Just having a consistent approach, if nothing else what that does is it helps you understand, analyze, develop appropriate interventions for your members."

While the procurement process was credited with delivering cost reductions this year, it would be unfeasible to go out to bid for health plans every year, according to Herman, who said procurements are "incredibly labor-intensive" and can be disruptive.

"Today's vote will keep the overall average price from increasing for GIC members, which is welcome news for them, the GIC and the state budget," Administration and Finance Secretary Michael Heffernan said in a statement.

The GIC on Thursday also expanded access to counseling, giving all public employees who qualify for the state-run health coverage access to 30 free minutes of legal consultation, free financial advice and a 24-hour hotline for other crises.

Right now, there is a patchwork of "employee assistance program" offerings through a variety of providers, according to the GIC, which selected the vendor Optum to provide the services to all active GIC-benefit eligible employees and their families.

The counseling would be available for active employees, whether they buy insurance through the GIC or not, and it is not available for retirees, according to Karin Eddy, the GIC's director of human resources, who said the program is designed to reduce workplace stress.

Optum will help with pet care, adoption and elder care, according to the GIC, among other assistance, and the company will promote its services to public employees, according to the GIC.


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