Walker budget director says self-insurance debate has been transparent

State Budget Director Michael Heifetz is stressing the state has been transparent in its discussions to potentially move state employees to a self-insured model in 2018.

Heifetz, who is on the Group Insurance Board that would start the decision-making process, said at yesterday’s GIB meeting the state will continue to give stakeholders “ample opportunity to comment” on the issue.

“Clearly their voices are being heard,” Heifetz said.

The move, which would need approval from the Legislature’s Joint Finance Committee, would essentially scrap the state’s current health insurance program. The Department of Employee Trust Funds currently pays premiums to health plans so they can insure state employees.

Under self-insurance, the state would instead pay for employees’ medical claims directly; supporters say that would reduce administrative costs. But some of the health plans that insure state employees say the move would disrupt Wisconsin’s competitive market, which they say has brought significant savings to the state.

Two separate consulting firms the state hired have split on whether the move would save the state money. The request for proposal ETF is putting together is intended to clear up that question by getting specific data from health plans and administrators.

The agency plans to release the RFP on July 22, with ETF staff discussing the responses and options at the GIB’s November meeting.

The process, though, has had an unusual amount of stakeholder input, said consultant Kenneth Vieira. Vieira is senior vice president at Segal Consulting, the firm that has recommended a move to self-insurance.

The state last month issued a request for comment on the methods Segal will use to gather information from potential vendors. It also will pre-release the RFP in June to get stakeholder input before finalizing it in July.

“I don’t think I’ve ever been involved with a state that’s pre-released their RFP twice,” Vieira said. “You can’t be more open than you’re being in this whole thing.”

The Wisconsin Association of Health Plans again raised concerns a move to self insurance would “hinder competition [and] disrupt local markets.”

The group, which represents some of the health plans that might lose customers in the change, said reducing competition is “never a positive step for consumers.” Senior executive officer Phil Dougherty also noted the premium savings the state has seen under its current program.

“The consultant’s recommendations will dismantle the current program and eliminate some of the best performing health plans in the state,” Dougherty said in a news release. “The recommendations under consideration will create new financial risk for the state, disrupt doctor-patient relationships and increase costs for other health care purchasers, local governments and local communities.”

See an earlier WisBusiness.com story on the self-insurance debate

— By Polo Rocha,