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.”
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.
Here is an issue. They said you will be able to keep your doctors. Unicare was accepted by all my doctors. Neighborhood Health was only accepted by 50% of my doctors. Health New England no one accepted thus giving Unicare a monopoly. This was a move to save the state money and re-use the savings on the backs of employees again. If this is so great why isn’t the private sector migrating away from these 3 vendors? Why as far as customer satisfaction the 3 offered are on the low scale? Why are we giving Unicare a monopoly? In an election year? Plus this does not happen to all employees.
Granted, current state workers and retirees have bases to complain – for example, terms in their union contracts and such. At the same time, GIC ultimately has to answer to taxpayers who largely cover state employees’ healthcare costs.
As such, finding a proper and lawful balance is thus essential even if it takes awhile longer to accomplish.
The other side of the equation are the heath provider costs, which go up, up up and are potential budget-busters in all city and towns across the Commonwealth.
Partners, recently, was approved by the state to take over Mass Eye and Ear – a move designed, as stated by Parners, to allow Mass Eye and Ear to charge the higher hospital rates that Partners can charge. This will increase state health costs by up to 61M.
And Neighborhood Health Plan, the subsidiary of Partners, offered GIC the largest provider discounts for eastern Massachusetts community health centers including Partners itself. Of course Partners is at liberty to charge in exchange higher rates to commercial insurance plans – take over the GIC business – then flip over and increase the rates to GIC in later years.