The state will seek bids this summer from companies looking to run a self-insurance program for state workers, on a regional or statewide basis, starting in 2018.

The Group Insurance Board, which oversees benefits for state workers, on Wednesday authorized the state Department of Employee Trust Funds to request proposals for self-insurance to better determine the cost and impact of such a program.

“We will never be able to make a decision unless we have the information,” insurance board chairman Jon Litscher said. “We will never be able to have the information unless we (get bids).”

A consultant has said Wisconsin could save $42 million a year through self-insurance, in which the state would pay medical benefits for nearly 250,000 state workers and family members directly instead of buying insurance from 17 HMOs. Gov. Scott Walker has said he would spend any savings on public education.

But another consultant said the move might cost $100 million a year. Some legislators and the Wisconsin Association of Health Plans, which represents 12 of the 17 HMOs, said the change could threaten the stability of the state’s regional health care system. Many of the HMOs are owned by providers around the state.

Herschel Day, an insurance board member, said getting bids from companies could clarify whether the move would save or cost money before the board makes a decision.

“We owe that to the members of the state to do that,” Day said.

ETF plans to issue its request for self-insurance proposals in July, with bids due by September. Results are scheduled to be shared with the insurance board in November, when the board is expected to decide whether to start self-insurance in 2018.

Mike Bare, research and program coordinator at the Community Advocates’ Public Policy Institute in Milwaukee, said the state is moving toward a “government takeover” of state worker health coverage. He said the state should use the Affordable Care Act marketplace instead.

“Self-insuring the state worker plan will remove choices and disrupt competition in the private insurance market,” Bare said in a statement. “It puts taxpayers at risk of paying higher health costs.”

Companies making bids will have to demonstrate adequate provider access in the regions they propose to serve, be willing to sign three- and five-year contracts and provide information on finances and program structure that will help officials decide if self-insurance makes sense.

“For example, information will allow the (insurance board) to weigh the pros and cons of a self-insured program under a regional structure using multiple insurers versus a single, statewide administrator approach,” Lisa Ellinger, an ETF administrator, said in a memo to the board.

Twenty states self-insure all state employees, and an additional 26 states self-insure some of their workers, according to the National Conference of State Legislatures.

Wisconsin self-insures less than 5 percent of state workers, through a plan outside of the 17 HMOs administered by Monona-based WPS Health Insurance.

Of nearly 250,000 state and local government workers and their family members in the $1.4 billion health benefits program, almost 100,000 are in Dane County. Dean Health Plan, Group Health Cooperative of South Central Wisconsin, Physicians Plus, Unity Health Insurance and WEA Trust compete for their business.

Segal Consulting said in November that the state could save $42 million a year through self-insurance, largely by avoiding $18 million in Affordable Care Act fees, cutting $11 million in administrative costs and eliminating $11 million in insurance company profits.

The move would also give the state more control over benefits, which would help it avoid the health law’s planned “Cadillac” tax on rich benefit programs, Segal said.

But the Wisconsin Association of Health Plans in January questioned Segal’s findings, noting that Congress in December suspended the Affordable Care Act fees for 2017 and delayed the “Cadillac” tax from 2018 to 2020.

ETF’s previous consultant, Deloitte, said in 2012 that self-insurance could save $20 million a year but might cost $100 million a year more.

Deloitte assumed many of the discounts currently negotiated with the state would go away under self-insurance, while Segal “assumed all current discounts would continue,” Ellinger said in the memo.

Ellinger said that “Segal collected more in-depth data for the most recent analysis.”

The insurance board is separately considering another proposal to offer no more than two health plans in each of three regions, plus a statewide plan. That could save $45 million to $70 million a year, according to Segal.

The insurance board on Wednesday also approved other requests for proposals — for a wellness program, a pharmacy benefit manager and data warehousing.

Last year, the board doubled most out-of-pocket costs for medical services this year, though premiums are down slightly.

David Wahlberg is the health and medicine reporter for the Wisconsin State Journal.

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(64) comments

janice12

brewskiee,

I find your comments on mandated OT interesting. I worked at Central Wisconsin Center and the overtime there was brutal! I worked the NOC shift and I was required to stay through the am shift almost every work day. There were weeks during the summer I was made to work 16 hours five days a week.

I only stayed there a few months. Nobody gets pay raises.

brewskiee

I know what what you went through. My sister was an RN at Central Wisconsin Center for a decade, but recently quit because the overtime was getting out of hand.

This increasingly has become a problem at all 24/7 state facilities - prisons, mental institutions, VA and long-term care facilities. What do you expect people will do when they're making pretty much the same wage they were in '08? No raises this year, and with another big deficit expected in the next budget, there probably won't be raises in the next two years either.

There's better opportunities out there.

the right side

You lefties keep saying we need to do what the State of Minnisota does, well they have been self-insured since 2002.

Stuck In The Middle With You

What we lefties are saying it's better to move to Minnesota a state that has proved it is better than Wisconsin by a country mile by every measure. Wisconsin's atmosphere is toxic and soon enough it's environment will be as well. Minnesota is the land of milk and honey.

Hogzilla
Hogzilla

Have you spent any time in the Iron Range recently?

truthzeeker

Good point! But on the other hand they don't have Walked as governor. :-(

rtk3000

Minnesota (not Minnisota) had only 2 HMOs in its plan and they had bad deals. Wisconsin has several HMOs to choose from, MANY OF WHICH ARE LOCATED IN OUR STATE so they create jobs and revenue for Wisconsinites. Why fix something that ain't broken, and that will reduce the quality of healthcare for so many in Wisconsin?

brewskiee

And self-insurance will be garbage under Walker, just like his handling of the state's economy.

And for the right side, Sabastian, and the other mathematically-challenged morons who salivate over the Fuhrer's every word, here's his record on the economy:

A paltry 32nd in private sector job growth the past 5 years.

http://www.jsonline.com/business/wisconsin-ranks-37th-in-latest-job-creation-report-b99635739z1-362794841.html

Last year we were ranked 38th.

http://host.madison.com/ct/news/local/govt-and-politics/wisconsin-ranks-th-in-private-sector-job-growth-in/article_31469e9a-c453-11e5-b5c1-ff460da94c02.html

And Wisconsin has witnessed the biggest drop of the middle class of any state in the nation.

http://finance.yahoo.com/news/middle-class-struggling-50-states-162600272.html

Heil Walker!

sebastian

Hardly an economic disaster.
But it is nice to see a public employee anti-walker apologist (troll for short)
cry about the private sector. Even only crocodile tears.

brewskiee

Sebastian,

Not only do you lack basic math skills, you apparently can't read well either. I said I quit the DOC - twice. What's wrong with you?

And the good 'ol troll label, huh? Okay, admittedly I've been posting a lot for this article, but you've been popping up just as much. Pot callin' kettle black there?

And sebastian proclaims Wisconsin's economic paltry economic statistics as no biggie. LOL!

sramme

If it is run by a company, why is it called 'self-insurance'? This is really employer-provided insurance with only one provider choice.

johnnn

"Gov. Scott Walker has said he would spend any savings on public education." The master of smoke-and-mirrors is at it again. He's hoping everyone latches onto the $25 million he's earmarking for education, not the $100 million he will slice from education.

WI_Expat

Think it's time for state workers to enjoy the "liberal savior to the healthcare system" and go to healthcare.gov

If it's good enough for the masses...it's good enough for the Workers of the State.

Live it, love it, own it

irisK

I doubt Walker, or the Legislators would want that for themselves. They have tbe same health insurance as the rest of the tax sucking parasites.

sebastian

"tax sucking parasites" is over the top.
But, as you're a public employee insider, who am I to disagree.

livesteam2

If Scott Walker had joined the exchange that could have been a solution.

buckthorn

The majority of people (i.e., the masses) get health insurance through their employer, not from a private plan via the exchange. What a hater. You just love to "give it" to those wealthy spoiled state workers, don't you?

The Right Stuff
The Right Stuff

It's about time state workers get theirs. This time, you'll be sorry you signed that recall petition.

brewskiee

You still think state employees have it good? LOL! Time to get your head out of the mid '90s.

But if you you're still jealous of state employees, go join 'em - they're leaving in droves! If you enjoy a job where your salary is almost exactly the same as it was 10 years ago, state employment is perfect for you. During my time as a correctional officer for almost 8 years, all COs got 2 1% raises (beyond step increases, which max out after 2 years) in '13 and '14. That was it! (And your get forced for a ton of 16-hour shifts - oh joy!)

But go ahead, good Nazi, and cheer for the Fuhrer's accomplishments: lackluster private sector job creation, and the BIGGEST loss of the middle class of any state in the nation for the past few years.

And BTW - I voted for Walker (stupidly) in 2010.

sebastian

Your raises indicate you've more than made up any Act 10 cuts.
How many other state employees have?

GrumpyProf

Can you read? Two 1percent raises and everything is taken care of? State employee wages are anywhere from 10 to 25 percent below national average for their peers and you think a couple one percent raises make everything okay. I suggest you get yourself to Madison because with math skills like that, you belong on Walker cabinet.

brewskiee

Yeah, where did you learn to do math? Those two 1% raises, for me, totaled 34 cents. When Act 10 got implemented, my family health insurance jumped from 80-some dollars per month, to over $200. All state employees too a pay cut.

Wisconsin correctional officers start off at $15.20 per hour, step increases will top you off at $17.17/hour 2 years later and you go NO HIGHER. Somebody with 2 years of experience will make the same as someone with 8. And correctional officers get required to work a ton of 16-hour shifts - multiple times a week.

sebastian

Get out of the state employee echo chamber.
Try comparing yourself to the average Wisconsinite.
And then tell me you're underpaid by 25%.
It's been 5 years. Quit your whining.

brewskiee

Sebastian,

Well, said I quit so I'm not in the echo chamber anymore. If you think $17.17/hour tops is worth dealing with hardened, dangerous inmates, what's stopping you from joining? The DOC's taking pretty much anyone they can get as long they don't have a felony and are in halfway decent physical shape.

The right stuff,

My anger issues come from dealing with hardened murders in maximum-security prison for nearly 8 years - and getting required to do 16-hour shifts 3 or more times per week. What's your excuse?

And I am in the private sector now - I took a job with a railroad company and I love it. Got a big jump in pay from $17.17/now at the DOC, to $23/hour now.

Every CO I know who left doesn't miss the job at all. Columbia Correctional Institute is severely short-staffed.

rtk3000

you are bad at math.

the right side

@GrumpyProf please provide source that Wis state employee's are paid 25% less that the national average.
@Brewskiee please seek help for your anger management issues, you won't last long in the private sector.

livesteam2

You really do want slaves don't you?

rtk3000

What the heck did state workers do for you except educate your children and protect/maintain yours and the state's property? But maybe you are not from Wisconsin, but live under a bridge somewhere with other trolls.

iponder

We are about to break another system that didn't need to be fixed. If they actually find a way to save some money, I would guess that others paying for their HMO, will simply pay more.

sebastian

Everything has to be paid for by somebody.
"Free" is only in the mind of the takers.

lute

"Walker said he would spend any savings on public education"

Walker already cut well over $25 million from the state employee health plans for 2016, passing the costs on to state employees through a doubling of out of pocket limits, increased copays, and huge increases in what members pay for necessary prescription drugs.

Did that money go towards "education"? No. it didn't. It was a drop in the budget bucket making up for lost revenue from Walker's presidential campaign talking point tax cuts.

Dice

The retirement system is next. They've been "studying" it since 2011.

A Wisconsin Taxpayer
A Wisconsin Taxpayer

Thompsons stole money from the retirement system,It took 7 years before he lost in court and had to pay the money back. That was before the Supreme Court was full of WMC paid shills who now decide cases on how much people contribute to their campaign.The big prize for Walker will be to privatize the investment board advisors and give it to a Wall Street firm for a big kickback. The firm will increase fees and steer pension money towards its favorite companies that provide further kickbacks. That is the Walker plan, He didn't get away with it yet because the first report said it was the best pension plan in the U.S. Next time, he will hire a private consultant just like the one hired for the Walker deathcare plan who will say whatever Walker wants them to say. You may think I'm exaggerating when I call it the Walker Deathcare plan, wait until your cancer treatment, your Osteoprosis treatment, and your asthma drugs are denied.

lute

"...wait until your... asthma drugs are denied"

Raising the copay until they are too expensive to buy will have the same effect as denying them. As of January 21, 2016, prescription drug copays for state employees are too much for some to handle. I picked up a refill of a generic drug for a family member right after the January 1 copay increase and that single generic monthly refill cost jumped from $15 to $50.

Other prescription copays jumped from a maximum of $50 to a maximum of $200 per monthly refill. With multiple prescriptions to refill every month, it's a certainty that some state employees and their family members will have to stop taking their medications to pay for other basic living expenses. And it's only going to get worse in 2017 and 2018.

sebastian

"Thompsons" didn't steal money from the system.
He tried to take a surplus and fix an anomaly in the system that kept
earlier retirees from getting the same adjustments as later retirees.

Greed isn't limited to Wall Street.

the right side

Actually, there are some issues that need addressing in the WRS.
> All employee's of WRS need to be paid out of the WRS's income and not be state employee's. All leased office and equipment space also needs to come out of the pension earnings.
>The Wis taxpayers % needs to have a ceiling, and has to have a out for taxpayers, as in if the national economy drops into the red for 2 consecutive quarters, the Wisconsin taxpayers stop contributing until 2 consecutive up quarters.

mysteryguest

So if I'm a state employee it will now be up to Walker, Fitzgerald and Vos whether I get my operation or not? Local communities went through all this years ago when they were picking cable providers. Every community picked the one with the lowest cost estimate, the cables were installed, then every year cable service cost went up. What was the sense? Let's hope part of the self insurance cost estimates include lobotomies for Walker, Fitzgerald and Vos.

Hogzilla
Hogzilla

Welcome to single payer.

GrumpyProf

Death panels for sure.

Observer5

Scooter says let the bribes and kickbacks begin.

A Wisconsin Taxpayer
A Wisconsin Taxpayer

Walker is expecting a big payoff either with a big "ark money " campaign contribution or a job after he leaves office like the jobs Thompson got being placed on corporate boards after he left Washington. Eitehr way, the losers will be all the current and state workers who worked their lives for low raises and a good health plan, the healthcare workers who work for the various HMOs,the families that will have to wait on hold on the phone while the out of state providers refuse to pay for a needed cancer treatment, and all the providers in the state. Walker could save tons of money accepting the medicaid money. He could save tons of money not wasting our pubic school dollars on voucher children that NEVER attended a public school, and other areas that anyone who can add and subtract would understand. Walker has ruined our state and continues to find ways to ruin our state. Welcome to the Walker denial of care death panels.

demosthenes

"Gov. Scott Walker said he would spend any savings on public education."
.....and if it costs an extra $100M, I'll take that from Public Education too!

ScooterTherapy
ScooterTherapy

All you peeps working for those insurance companies, start working on your resume, you're about to need one. Don't worry though, there are plenty of min wage jobs out there. Plenty of dairy farm openings if you like milking cows. Welcome to the jungle. [scared] Hopefully you did not vote republicon. That would be really depressing.

Hogzilla
Hogzilla

Isn't this plan almost identical to what Sanders wants on a national level? Why aren't you concerned about all the people in the insurance industry that would be out of work if we went to a single payer system for everyone? If you think there will be a work shortage if the state goes to a single payer model, what do you think will happen when we eliminate insurance almost entirely?

lute

With Walker's rubber stamp hand picked insurance board in place, is the outcome even remotely in doubt? Complete dog-and-pony show leading to the inevitable increased cost to taxpayers and members, reduced coverage and benefits for members, and all of that sadistically complemented by the destabilization of the entire region's health care system.

t won't be just state employees' families' health and financial well being destroyed by this disaster waiting to happen. But what else would we expect from Scott Walker.

KickiceWis

One question to ask is the State Assembly, Senate and the Governor going to be required to be self insured or will they fall under a separate policy?

Custos
Custos

Unless they pass a bill to separate themselves, the upper echelon folk partake of the same benefit pool as the janitorial staff. ( They just get more of it because their salaries are higher. )

badgerfan12

As someone who has worked in healthcare for 27 years, this is a very bad proposal. There are countless patients out there who are constantly denied services by they "personal health insurance" providers for preventative health. Mammograms (for 40 year olds) and screening colonoscopies (for 50 years olds) are being denied the procedure because they have no "symptoms" or they feel it is not needed. I run access data for these procedures and it's weekly that patients are denied this common sense preventative health procedure, and cancelling their appointment because they don't want to pay out of pocket. Our government has lost their common sense minds.

davea

You mean our "republican government"!

badgerfan12

Yes, I meant our "republican" government has lost their common sense minds.

brewskiee

That's too bad. Health insurance through the state, even with impact of Act 10 and recent deductible/copay increases, is still pretty good and remains one of the few good incentives left for state employees. If this gets watered down, there really won't be any good incentives left to work for the state - unless you're happy accepting ample vacation time in exchange for stagnate wages.

It makes me glad I left the DOC last month. There's defiantly better opportunities out there.

sebastian

State health insurance is a "cadillac" plan.
Obamacare says so.

brewskiee

I said it was pretty good, although with recent drug copays jumping $50 max for generic $200 max for regular, it's becoming less Cadillac. My point is if gets further watered down, there will be no point left to work for the state.

In fact, if you think things are so good with state employees, why don't you join? The DOC is hiring Correctional Officers like mad! When I left Columbia County Correctional Institute, its vacancy rate was approaching 30%.

You'll top off at $17/hour after 2 years and go no higher. And let me tell you about overtime - you'll get it whether you want it or not: 16-hour shifts, multiple times per week (at CCI, it was 3 or more times per week). You'll also work most weekends, most holidays (and expect 16-hour days on weekends).

And the work environment? I've seen fresh recruits with combat experience turn coat and run after a few months. I endured a concussion last fall, which convinced me to leave, and CCI recently saw an inmate suicide and an officer sent to the hospital. Indeed, maximum-security prison is getting crazy.

So go join the DOC if you think correctional officers have it peachy, because they need help.

Crow Barr
Crow Barr

Smoke screen, taking bids. Me thinks they got the high bidder selected already, palms greased, and why take bids, like they did away with Civil Service, just give it to your best contributor.

davea

We all know, and are aware, how well this administration is at "spinning numbers". This should be done by an independent, none state agency!

Stuck In The Middle With You

If your a public or state worker my recommendation is retire as soon as you can, if you can and leave this state. Also encourage your kids to go on to college in another state or join the military. Once you live somewhere else you'll see that it's not that special here.

brewskiee

You nailed it exactly. Anybody who's a few years from retiring will stick it out, but otherwise, nobody today considers long-term employment with the state.

When you look at what state correctional officer makes, for example, you'll discover even the dirt poor northern counties' jails pay better than the state.

ItSavesLives
ItSavesLives

Save the State $42 million, cost the workers out of pocket $100 million.

sebastian

"Free" really isn't.

Lionheart

Premiums went down. Yep, about $7/month for family coverage, while out of pocket costs doubled. So what do you think the elimination of all those HMO positions will do to the State's economy? And when 200,000+ people aren't being served by them anymore there WILL be job losses.

rat

They don't care. Most of the people affected live in Dane County. The race to the bottom continues. I'm guessing the savings or losses is somewhere between the -100 million to +42 million.

lute

"They don't care. Most of the people affected live in Dane County."

And outside of Dane County, the most visible group affected is UW-System employees. And the Republicans have made it clear that those people are just leaches, too. So no biggie, I guess.

GrumpyProf

There are state workers all over the state. Who knew?

sebastian

Make work and redundant jobs.
That's how you keep an economy going.

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