Health insurance premiums for state workers won’t go up next year, but roughly a fifth of the 250,000 workers and dependents will need to change health plans and 1 percent will have to switch doctors.
The changes, approved Wednesday by the Group Insurance Board, come after the Legislature’s budget committee in June rejected Gov. Scott Walker’s plan to self-insure state workers. Under that plan, the state would have paid medical claims directly instead of paying premiums to HMOs.
The budget committee told the state Department of Employee Trust Funds, or ETF, to find about $60 million in savings over two years — the amount Walker said self-insurance would save — through benefit changes, negotiations with HMOs and program reserves.
The insurance board said Wednesday it would tap about $29 million in reserves next year, which will prevent an increase in premiums in 2018. The Department of Employee Trust Funds said it saved $48 million in negotiations with HMOs and $19 million in pharmacy costs. The general fund portion of those savings is about $36 million.
Similar moves in 2019 are expected to yield about $25 million in general fund savings, for a total of $61 million in the 2017-2019 budget, said ETF spokesman Mark Lamkins.
Premiums for medical and dental coverage, which for most people are now $88 a month for individuals and $219 for families, won’t go up for state workers. Some local government workers covered by the state plan might see increases, however.
Six of the 18 health plans that currently insure the government workers have dropped out next year, largely because of “aggressive negotiation,” said Lisa Ellinger, an ETF administrator. The plans are: Anthem Blue Preferred Northeast, Arise Health Plan, Health Tradition Health Plan, Humana, UnitedHealthcare of Wisconsin and WPS.
About 53,000 people insured by those plans will have to switch to another plan during open enrollment Oct. 2-27, but only about 2,500 people will need to find new doctors, Ellinger said.
Ten health plans will be in the program next year. One of them, Quartz, is a merger of three plans participating this year: Unity Health Insurance, affiliated with UW Health; Physicians Plus, affiliated with UnityPoint Health-Meriter; and Gundersen Health Plan of La Crosse.
WEA Trust is taking over a statewide plan that had been run by WPS.
Though the changes approved Wednesday achieve the $60 million in savings in a slightly different way than outlined by the Legislature’s budget committee, they follow the general idea, Ellinger said.
“I feel confident that what we are proposing here today aligns with (the budget committee’s) provision,” she said.
The Legislature still hasn’t approved the 2017-2019 budget, meaning Walker could veto parts of it, said Michael Farrell, chairman of the insurance board. But while the savings don’t stem from moving to self-insurance as Walker wanted, vetoing the changes would be unwise, Farrell said.
“It wouldn’t be in the governor’s best interest even to veto because we achieved the target,” he said.
Michael Heifetz, an insurance board member and the state’s Medicaid director, said tapping into reserves to keep costs down next year, instead of shifting to self-insurance, might cause problems in later years as health care costs continue to rise.
“We may have moved on from a difficult situation for the moment,” Heifetz said. But, “we have likely caused ourselves more difficult situations in the future.”
‘It wouldn’t be in the governor’s best interest ... to veto.’ Michael Farrell,
insurance board chairman