Group Insurance Commission reverts to status quo

THE STATE’S GROUP INSURANCE COMMISSION on Thursday shelved an ambitious proposal to save an estimated $21 million by paring back the number of health insurance carriers available to its 430,000 state and municipal customers and opted instead for a status quo approach that will save just $1 million.

Commission members initially backed the ambitious proposal on an 8-5 vote on January 18, but on Thursday took a series of votes first to toss out the earlier decision and then reinstate the three carriers that had been booted. Officials said they hope they can limit aggregate premium increases to less than 2 percent with the new approach. The commission’s meeting was held in the hearing room at the state Transportation Building to accommodate a large turnout.

Board members who previously supported the more ambitious proposal said they felt compelled to go with the status quo because of a botched rollout of the initial plan that caused many Group Insurance Commission customers to believe (mistakenly, according to GIC officials) that elimination of the insurance carriers would mean members affiliated with those carriers would no longer have access to their doctors and hospitals.

“I don’t think it takes a political expert to say the process was flawed,” said Melvin Kleckner, a board member from the Massachusetts Municipal Association.

Valerie Johnson, the chairman of the GIC board, said she would have preferred to continue supporting the more ambitious proposal, but concluded that backing the status quo was appropriate to rebuild trust with the commission’s customers.

Michael Heffernan, a board member and a member of Gov. Charlie Baker’s cabinet, also flipped his vote. He said it was necessary to give up the $21 million in savings to restore the peace of mind of Group Insurance Commission members. Using a baseball analogy that rippled through the discussion, he called the outcome a triple instead of a home run.

Heffernan declined to talk with a reporter after the meeting, ducking out a series of side doors. Gov. Charlie Baker, his boss, had distanced himself from the Group Insurance Commission’s earlier vote amid a storm of protest from its customers.

The staff of the Group Insurance Commission, led by executive director Roberta Herman, wanted to keep premiums and copayments in check by streamlining the delivery of health care services to members. They decided the Group Insurance Commission would self-insure, paying claims itself, giving the agency greater control over health plan offerings. They also decided to farm out pharmacy coverage to two outside firms, a move that is expected to generate $500 million in savings over three years.

As part of a procurement process for insurance carriers, the staff of the Group Insurance Commission also recommended paring back the number of carriers from 17 to five. For active employees, only three companies were selected – UniCare, Neighborhood Health Plan, and Health New England. Tufts Health Plan, Fallon Health, and Harvard Pilgrim HealthCare were excluded.

Herman insisted state procurement regulations barred the agency from publicly discussing the reduction in insurance carriers until after the board voted on January 18. But delaying the public discussion until after the vote set off a firestorm of protest as many of the commission’s customers came to believe the vote would limit their choice of doctors and hospitals. Herman insisted no one would lose access to their doctor or hospital provider because UniCare’s network includes every provider in the state, but her personal assurances were seen by some board members as too little too late.

“We can’t expect our customers to just trust us,” said Kleckner.

Herman has acknowledged the rollout of the commission’s plan didn’t go well. She said the agency has difficulty getting information to its customers. For example, she said, the commission has the email addresses of only 30,000 of its customers, a small fraction of the total.

Eileen McAnnenny, a commission board member and the head of the Massachusetts Taxpayers Foundation, said the commission was trying to do too much. “There was too much change too quickly,” she said.

Timothy Sullivan, a board member from the Massachusetts Teachers Association, said he received the materials on the reduction in health insurance carriers at 5:30 p.m. the night before the vote. He said the process gave him no time to consult the teachers he represents. “It is clear we need some changes here,” he said.

Commission board members Tamara Davis and Christine Clinard were the only ones to hold out for the more ambitious proposal. “I think we’re confused and emotional,” Davis told her fellow board members, asserting that the more ambitious proposal would save customers money and guarantee them access to their current health care providers.