The state Department of Employee Trust Funds on Friday sought bids from companies that want to be part of a possible self-insured health benefits program for state workers.
The long-expected request for proposals seeks information on customer service, data security, provider networks, provider payments, and medical cost and health management, among other categories.
The department’s Group Insurance Board is expected to vote in November on whether to adopt a self-insurance model in 2018 for 250,000 state and local government workers and their family members.
Currently, nearly all of the workers and dependents, almost 100,000 of whom are in Dane County, are covered by 17 HMOs that receive premiums and accept the risk for claims.
Under self-insurance, the state would pay benefits directly and take on the risk. One or more companies might help administer the program.
It’s possible self-insurance might be mixed with parts of the current program.
Consultants have said moving to self-insurance could cost $100 million a year or save $42 million, largely by avoiding $18 million in Affordable Care Act fees, cutting $11 million in administrative costs and eliminating $11 million in insurance company profits.
Gov. Scott Walker said any savings would be used on public education.
Bids, due in September, should better estimate potential costs or savings, said Lisa Ellinger, a Department of Employee Trust Funds administrator.
But Phil Dougherty, senior executive officer of the Wisconsin Association of Health Plans, which represents 12 of the 17 HMOs involved in the current program, said the bid process won’t evaluate other important factors.
The association opposes self-insurance.
“There are serious considerations outside the scope of the (request for proposal) process that must be explored — real consequences, ranging from elimination of choice for consumers and greater financial risk for taxpayers to market instability and higher costs for other health care purchasers and local communities,” Dougherty said in a statement.
If the Group Insurance Board adopts self-insurance, the state legislature’s Joint Finance Committee would have oversight of any contract.