Six health plans no longer insuring state employees next year

Six health plans that currently offer health insurance to state employees will not be doing so next year, according to the Department of Employee Trust Funds.

Their exits mean about 53,000 people will have to change to the 10 other health plans that are planning on offering coverage for state employees next year.

The news comes weeks after lawmakers rejected Gov. Scott Walker’s efforts to substantially change the program and as state officials work on setting premiums for next year. The Joint Finance Committee directed the agency to come up with projected savings in other ways but limit any possible cost increases to employees.

ETF says lawmakers’ rejection of Walker’s plan prompted the agency to develop contracts with insurers that would “keep premium costs down and not pass on additional costs to members and employers.”

“Consequently, some health plans chose not to participate next year,” the agency wrote in a Q&A to enrollees.

The ETF program covers state employees and employees at several local governments that choose to offer health benefits through the state plan. In all, about 250,000 people are covered through the program, including dependents and some retirees.

The Group Insurance Board meets on Aug. 30 to decide premiums and the structure for next year, and ETF wrote in the Q&A for enrollees that state officials “strive to keep cost increases to a minimum.”

ETF wrote most enrollees will be able to keep their current doctors and that the agency is “working with health plans to encourage provider contracting efforts to fill any gaps in services.”

The insurers who are exiting the program are:
*Anthem Blue Preferred Northeast, which covers 4,300 people
*Arise Health Plan, which covers 1,700 people
*Health Tradition Health Plan, which covers 4,600 people
*Humana Eastern and Western, which covers 18,100 members
*UnitedHealthcare of Wisconsin, which covers 14,000 people
*and WPS, which covers 10,600 people.

Humana spokeswoman Alissa Krinsky said the company isn’t participating partly “due to an inability to mutually agree on contract terms” but noted the news doesn’t affect Humana’s other offerings in Wisconsin.

“In the coming months, we will help ensure a seamless transition for active and retired state employees who are current Humana members, as they select benefits for 2018,” she said. “In addition, we will continue to work with the state and the Department of Employee Trust Funds in the hopes of identifying future opportunities to serve state employees and retirees.”

WPS had a contract with the state to offer a self-insured plan for state employees, but the contract runs out at the end of the year.

WPS spokesman Tom Enwright said the company decided not to submit a bid to offer that product again next year. As for the exit of Arise Health Plan, a WPS subsidiary, Enwright said the state program “no longer is aligned with the strategic direction for Arise Health Plan.”

The insurer WEA Trust is expected to take over WPS’s offering and its enrollees, though WEA Trust spokesman Kyle Humphrey said it would be a fully-insured plan instead of a self-insured one. The move is pending approval from the Group Insurance Board.

Other insurers who are exiting the program either declined to comment or couldn’t immediately provide statements on their decision.

Michael Horecki, a spokesman for AFSCME Wisconsin, which represents state employees, said the union is looking into the issue and is “trying to figure out how this is going to impact our members.”

The Wisconsin Association of Health Plans was a major opponent of Walker’s proposal to switch the program to a self-insured model and narrow the amount of insurers the state works with, saying the current competitive system works well and keeps cost down for state employees.

The group’s members will make up many of the 10 insurers that are participating in the program next year. Tim Lundquist, the group’s director of government and public affairs, said the news reflects “competition in action.”

“Thanks to Wisconsin’s dynamic and competitive health insurance market, government employees will continue to have a choice of high-quality, cost-effective health plans,” he said.

See the ETF announcement:

See the ETF Q&A for enrollees:

–By Polo Rocha

This post has been updated with additional reaction.