ETF to develop requests for self-insurance bids

The state’s Group Insurance Board has voted to develop an RFP to self-insure state employees.

The action is aimed at evaluating whether moving to self-insurance would be positive for the state budget, as two consulting firms came up with much different estimates. Under self-insurance, the state would pay for employees’ medical claims directly, rather than pay premiums to insurers so they can handle medical claims.

The responses from the RFP, which will be crafted in the coming months, would ensure the GIB has information that’s more specific than consultants’ estimates. That means, for example, that the board will be able to evaluate whether certain vendors can negotiate similar prices with providers to what the state currently pays.

“We will never be able to make a decision unless we have the information,” GIB Chair Jon Litscher said at yesterday’s meeting. “We will never be able to have the information unless we have the RFP process.”

Michael Heifetz, who is Gov. Scott Walker’s budget director and a GIB member, said he looks forward to “seeing objective results” on the effects of self-insurance.

He also pushed back against letters the GIB has received opposing a move to self-insurance. The board, Heifetz said, has had “transparent conversations” for years on the issue and won’t make any concrete moves without positive RFP results.

He also pointed to the GIB’s other efforts to improve its data analysis and wellness programs as signs the board wants to “maintain the excellent benefits we have for our state employees.”

“The demagoguery and conspiracy theories are, at best, not constructive, and at worst, completely distract from the mission of this board,” Heifetz said.

Among the options the board will evaluate will be whether the state should consolidate the number of insurers it works with. It could, for example, pay a national administrator to manage a single statewide program, rather than contract with multiple smaller health plans.

The state’s Department of Employee Trust Funds, which manages employee benefits, is hoping to distribute the RFP this summer and bring results to the board in November. That would ensure the board has enough time to move to a self-insured program by 2018.

See an earlier story on why the two consultants differed.

–By Polo Rocha,