What was the Group Insurance Commission trying to do?

Lost amid the shouting, health care proposal has some interesting angles

THE GROUP INSURANCE COMMISSION has taken enormous heat for voting to restructure its network of health plans, but almost no one, including the commission itself, has explained the reasoning behind the decision to reduce the number of carriers from 17 to six. As a result, the debate has focused more on process than on substance.

The commission voted 8-5 with two abstentions to move from six carriers to three for active employees. The number of Medicare carriers was cut from five to two and the number of carriers for retired municipal teachers was reduced from six to one. Officials said they expected the changes to save the commission about $20 million.

Since the vote, union officials and their backers in the Legislature have pushed to overturn it. Gov. Charlie Baker initially urged the commission to explain its vote. Days later, he adopted a tougher stance, saying “the way this has been rolled out is very poor.” The Group Insurance Commission then said it planned to reconsider its earlier vote on Thursday.

A slide presentation to board members prior to the vote on January 18 offered some insight into the decision-making process. It described the current provider network as a complex, undifferentiated patchwork, characterized by a large number of plans with different types of funding and various approaches to behavioral health and pharmacy benefits.

By reducing the number of health plans and streamlining the funding and benefit approaches, the presentation said, the Group Insurance Commission’s 430,000 state and municipal enrollees would gain access to simplified, meaningful health care choices at far less administrative cost.

The analysis, performed by the consulting firm Willis Towers Watson, estimated 100,368 Group Insurance Commission subscribers would have to change plans under the restructuring, not the 200,000 claimed by union officials and politicians. The presentation also said “our goal is that GIC subscribers have access to their current physicians and hospitals with comparable coverage and benefits after plan migration.”

The slide presentation included a detailed analysis of how bids were scored. UniCare, Health New England, and Neighborhood Health Plan scored the highest overall for commercial insurance (3.5 out of a possible 5), while Fallon (2.7) and Harvard Pilgrim Health Care (2.8) scored the lowest. Tufts Health Plan (3.4) was just below the leaders.

Willis Towers Watson estimated the Group Insurance Commission could save $8.3 million by dropping Harvard Pilgrim and Fallon from the list of commercial carriers; $13.8 million by dropping Harvard Pilgrim, Fallon, Tufts, and Health New England; and nearly $20 million by dropping Harvard Pilgrim, Fallon, and Tufts. The board of the Group Insurance Commission backed the $20 million savings proposal.

“UniCare demonstrated that it has an unparalleled focus on the GIC and its needs, is willing to  bring new approaches to the table, can cover the broadest geography, and can offer a variety of products,” the presentation said.

Neighborhood Health Plan, a subsidiary of Partners HealthCare, “offers the largest provider discounts for eastern Massachusetts community health centers and Partners,” according to the presentation. Neighborhood Health Plan’s cost proposal scored 4.2; the closest competitor was at 3.0 and the rest were at 2.2 or below.

Partners HealthCare, which owns Massachusetts General, Brigham and Women’s, and numerous other hospitals, is typically regarded as the highest-cost health care provider in Massachusetts.

“Health New England offers very attractive pricing within a service area in an underserved geographic niche that is important to the GIC’s membership,” the presentation said.

For Medicare, Tufts Health Plan (4.7) had the highest overall score, followed by UniCare (4.4). For retired municipal teachers, Unicare was the clear winner at 4.2.

The five labor representatives on the Group Insurance Commission voted against the proposal.

The Massachusetts Teachers Association, in a letter to its members on January 18, called the Group Insurance Commission vote “a travesty of government by the administration of Gov. Charlie Baker.” The letter questioned the secrecy surrounding the vote and what it claimed was “no public notice on its crucial specifics.”

Meet the Author

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.

Eileen McAnnenny, a member of the Group Insurance Commission board and the president of the Massachusetts Taxpayers Foundation, said she abstained from the vote because she wanted more time to study the proposal. She said members raised concerns about the rushed process at the board meeting, but said there was no pushback on the goal of streamlining the Group Insurance Commission’s network of health plans.

“This was part of a thoughtful continuous effort to reduce administrative overhead,” she said, noting that higher overhead typically translates into higher premiums.