GIC health premiums will fall or stay flat

Even without plan consolidation, rates are holding steady or falling

STATE HOUSE NEWS SERVICE

ABOUT HALF 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. “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. Expectations had been that 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 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. The agency also made the whole system self-insured so that the government bears the risk and insurance companies handle administration, according to Herman. The state was previously partially self-insured, Herman said.

“Just having a consistent approach, if nothing else what that does is it helps you understand, analyze, develop appropriate interventions for your members,” Herman told reporters after Thursday’s meeting.

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.

Timothy Sullivan, a fourth-grade Brockton teacher who represents the Massachusetts Teachers Association on the GIC, said health insurance premiums staying flat is “good for the members” overall.

“I just want to say how much I appreciate the leadership of the commission,” said Melvin Kleckner, the town administrator of Brookline who represents the Massachusetts Municipal Association on the commission. Holding health insurance rates flat will have a “significant” impact on Brookline’s budget, he said.

“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,” said Administration and Finance Secretary Michael Heffernan 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.

Optum was the contractor the state brought on to fix the broken Health Connector website four years ago.

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The annual $1.6 million cost of the employee assistance program will be financed with 89 cents added to the per-employee monthly premium for fiscal 2019. Employees pay for a portion of their premium while their employers pick up the rest.

So far in fiscal 2018, the GIC has spent $1.2 billion, which is $60.6 million, or almost 5 percent, below the amount budgeted. If there is a surplus at the end of June, the employee portion will remain in the employee share claims reserve and the state portion will return to the general fund, according to the GIC.