The Joint Finance Committee unanimously approved a bill Thursday that would put the committee in charge of overseeing certain state health insurance program changes.
JFC wants to have the last word on final changes the Group Health Insurance Program makes, according to Phil Dougherty, senior executive officer of Wisconsin Association of Health Plans. The program is in charge of providing commercial health insurance to public workers and their families, and the governor appoints members to the Group Insurance Board within the Department of Employee Trust Funds to run the program.
The state, Dougherty said, buys insurance coverage for state employees in the commercial health insurance market, which is purchased through the State Group Health Plan.
Dougherty said Wisconsin has the most competitive health care market in the country.
“Having a competitive health insurance market is important,” Dougherty said. “Insurance markets with a greater number of competing health plans generally provide greater access to lower-cost health insurance.”
Dougherty said the Group Insurance Board believes it can make substantive changes without the Legislature’s involvement, but the authors of the JFC bill say they want to make it clear they must be involved in decisions about the State Group Health Plan.
One of the reasons JFC wants to be more involved with overseeing changes the board makes to the State Group Health Plan is because the Department of Employee Trust Funds has been considering plans to move to a self-insurance model, Dougherty said.
Justin Sydnor, assistant professor in the Department of Actuarial Science, Risk Management and Insurance at the University of Wisconsin School of Business, said self-insurance would mean rather than paying for each employee to have health insurance with different health insurance companies, or HMOs, the state would run their own plan instead.
“For a very large employer like the state of Wisconsin, it’s fairly typical to be self-insured so that you don’t pay insurance companies to do those costs for you,” Syndor said. “It’s not an unusual thing. Many other states are self-insured in that way.”
Syndor explained the board met with Segal Consulting to examine cost-saving measures for the program, which is how they started considering the self-insurance program.
Segal reported to the board in March that the move could lower administrative expenses, eliminate some fees under the Affordable Care Act and eliminate most of the premium tax, resulting in potential savings of $50 million to $70 million annually, the Associated Press reported.
But JFC is concerned, Dougherty said, because the state’s budget would pay for a self-insurance model.
Because JFC is responsible for state fiscal policy, and the size of the State Group Health Plan is roughly $1.5 billion, the committee believes they should have a say in changes the Group Insurance Board makes to health insurance policies.
Gov. Scott Walker vetoed a plan for the 2015-17 budget that would have given the Joint Committee on Employee Relations oversight of the Group Insurance Board, according to a statement from the Wisconsin Association of Health Plans. Walker thought the committee would then micromanage the board’s decisions, so JFC tailored their plan to have limited review power.
The bill is not yet scheduled to be heard on either chambers’ floor.
