State board delays decision on self-insurance changes

The state’s Group Insurance Board today delayed a decision on a wide range of possible changes to how the state provides health insurance to its employees, including switching them to self-insurance.

GIB Chair Michael Farrell said the board will reconvene in January and has asked staff at the Department of Employee Trust Funds and Segal Consulting to gather more data.

“We are not taking these decisions lightly,” Farrell said.

The board decided against acting on the issue in closed session, as the data they reviewed include confidential pricing information from insurers and providers. An ETF spokesman didn’t respond to a request for comment on what kinds of additional information the board is seeking.

Yesterday, the GOP co-chairs of the Legislature’s Joint Finance Committee had said the GIB should take “more time if necessary” to fully evaluate its options. Sen. Alberta Darling, R-River Hills, and Rep. John Nygren, R-Marinette, said officials have “only scratched the surface on improvements” to the current program and that they want to work with GIB members on changes.

The options the GIB is considering include moving employees to a self-insured model, in which the state pays employees’ medical claims directly instead of paying premiums to health insurers. They also include setting up regions for insurers to compete in, moving away from its current system of letting insurers compete county-by-county. And they include a mix of the two.

Another option would make several changes to the program but keep its structure largely in place. Among those changes are: entering three-year contracts with insurers instead of one-year deals; and have ETF set premium levels, a departure from the current system of ETF negotiating rates with insurers.

A coalition of health care groups has cautioned Gov. Scott Walker on the impacts of a move to self-insurance, saying any decision needs to fully evaluate “the potential repercussions” for taxpayers and the overall health care marketplace.

Michael Heifetz, a GIB member and the state Medicaid director, pushed back against some of the “fear-mongering” in the public debate on the issue.

“Our job … is to sift and winnow through all of that and just get to the right answer that preserves the benefits that we have all discussed,” he said. “No one at this table has discussed reducing them.”

The Wisconsin Association of Health Plans, whose members could lose business under some of the changes being considered, has been among the biggest opponents of self-insurance and regionalization. Phil Dougherty, a spokesman for the group, said after the meeting the health plans “recognize that more can be done in the current competitive model to achieve the state’s financial and quality goals.”

“Moving to Segal’s regionalization strategy would create the risk of reducing competition and choice, eliminating high quality health care networks and separating plan participants from their doctors and medical homes,” he said. “The right answer for the state is to use the current competitive structure and Wisconsin health plans to build on what works.”

See the letter from Darling and Nygren:

See a memo outlining the GIB’s options: