GIC chief takes the fall

GIC chief takes the fall

Senators focus on process, less on substance of cost-cutting plan

THE HEAD OF THE STATE’S Group Insurance Commission took the fall on Wednesday for a bungled rollout of a plan to cut health care costs for more than 400,000 state and municipal workers, but the plan itself seemed to emerge relatively unscathed from a Senate oversight hearing.

Several Democratic senators angrily denounced the way the plan was rushed to a vote without proper public vetting. Sen. Karen Spilka of Ashland said the commission’s vote to cut the number of health plans available to members from 17 to five caused more outrage and consternation than any other issue she has dealt with in state government. She said the Group Insurance Commission’s vote on January 18 left state and municipal workers “alienated” and “unappreciated.”

Acting Senate President Harriette Chandler of Worcester said the Group Insurance Commission’s “process was flawed.” Sen. Cindy Friedman of Arlington said the process caused lasting damage. “I’m looking for how we can put trust back in the system,” she said.

In her remarks, Roberta Herman, the executive director of the commission, was contrite, occasionally tearing up and pausing to gain her composure. But she also justified her actions and defended the plan itself.

“I take accountability for the events that transpired over the last couple weeks,” Herman said, but later added that the commission was forbidden from communicating specific details of its plan until the commission voted on January 18.

Describing herself as someone who likes to aim high, Herman said the push to reduce costs originated with feedback she received from Group Insurance Commission members a year ago after the agency was forced to hike premiums, co-pays, and deductibles. “Members were livid,” she said.

About halfway through last year, the commission began the process of negotiating new contracts for health care, pharmacy, and behavioral health, a process that typically comes around every five years. The pharmacy negotiations resulted in savings of $500 million over three years, she said.

With health care, Herman said, there were too many insurance carriers doing too many things in different ways. She wanted to simplify the system by reducing the number of carriers and having them all operate under the same rules. For example, the commission would self-insure itself; previously, there was a hodge-podge of insurance approaches. The overall goal was to reduce costs while allowing members to retain their care providers and permitting the commission to oversee the carriers more effectively.

Ultimately, the commission voted 8-5 with two abstentions to support Herman’s plan to reduce the number of carriers from 17 to five. Under the plan, current employees would have a choice of UniCare, Neighborhood Health Plan, and Health New England. Tufts Health Plan, Fallon Health, and Harvard Pilgrim were jettisoned. Tufts and UniCare were selected as options for retirees.

Under questioning from the senators, Herman acknowledged some members of the commission were uncomfortable with the choices and wanted more time. She said the commission tried to agree on a future meeting time, but couldn’t. She noted that time was short because the commission still had to negotiate benefits and pricing with its carriers by April.

Herman said her original plan was to narrow the list of carriers and then hold meetings with Group Insurance Commission members around the state to hear what they wanted in terms of plan benefits.  But she said those meetings focused more on the decision to reduce the number of carriers and there was almost no discussion of benefits.

“It was definitely a miscalculation,” she said.

Asked whether Gov. Charlie Baker supported Herman’s plan, a spokesman pointed to two earlier comments in which the governor said the intent of the plan was “noble” but the rollout was flawed because “there was not a good process there to communicate what this was going to mean to people.”

Senators pressed Herman on why she was so confident workers would not lose access to their doctors and health care providers when more than 100,000 of them would have to change health plans. She said the commission’s analysis indicated few members would have to change doctors, primarily because UniCare included almost every provider in its network.

Peter MacKinnon, president of SEIU Local 509, told the senators that 200,000 state employees would have to shift to new health plans under the commission’s plan. He shared two examples of union members who would lose their carrier and lose access to facilities that currently treat their children. According to MacKinnon, the families might be able to find new caregivers, but it would take time and cause disruption.

Friedman raised concerns that UniCare is a for-profit, out-of-state company. She also said an affiliate of UniCare in another state was charging its customers the full cost of emergency room visits if the visit was not deemed to be an emergency.

Herman noted the Group Insurance Commission has been working with UniCare for 30 years. As for the emergency room issue raised by Friedman, Herman said that wouldn’t be a problem in Massachusetts because the commission planned to self-insure itself, which means it would decide what would be covered and what would not be covered. “As self-insured, we decide,” she said.

The questions went on and on. There was one about the small size and lack of experience of Neighborhood Health Plan and Health New England. There was another about Partners HealthCare’s ownership of Neighborhood Health.

Herman and the senators had a good give and take, but it was probably too little too late. The Group Insurance Commission is scheduled to meet on Thursday to reconsider its earlier vote. The assumption is that the carriers excluded by the earlier vote will be added back in.

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

A consultant hired by the Group Insurance Commission estimated the agency would save $20 million by selecting UniCare, Neighborhood Health, and Health New England.  Adding Harvard Pilgrim, Fallon, and Tufts back into the mix will probably eliminate most, if not all, of the savings.

“While I recognize that our agency did not meet the expectations of our members, Legislature, and others, my testimony today is an opportunity to begin a fresh discussion regarding the role of the GIC, its mandate, the processes that support and surround it, and its proper place in the health insurance marketplace,” Herman said. “Public managers and their employees should be empowered to bring forward bold ideas that provoke civil and substantive discussion.”