State Agencies & Local Health Employers
Vol. 18, No. 10
June 29, 2001
GIB Adopts Changes to Help Curb Rising Health Insurance
At their June 19, 2001 meeting, the Group Insurance Board adopted
significant changes to the upcoming health insurance premium rate
development and negotiation process with the Health Maintenance
Organizations (HMOs). The changes are designed to prevent excessive
or unwarranted rate increases by health insurance plans participating
in the State of Wisconsin Group Health Insurance program for 2002.
The Board approved steps to put individual health insurance plans
on notice that they will not be allowed to participate in the health
insurance program if the Board deems their final premium bids unsatisfactory
or not justified. The Board intends to critically examine all proposed
premium rate increases for coverage year 2002. Negotiations between
the Board and the participating plans on the proposed premium rates
occurs in early August, with final rates set by month's end.
ETF has learned that some of the health insurance plans have tentatively
suggested premium increases for next year that appear to be out
of line, based on their claim experience. The proposed rates may
not be supported or justified by the plan's claims experience.
This discovery prompted the Board's action to make procedural
changes to improve the current process without becoming too cumbersome.
The major changes are as follows:
Upon review of the claims and other data supplied by each plan, the
Board's actuary will independently develop a recommended
premium range for each plan.
Plans with proposed bids that fall outside of the recommended
range will be called in for negotiations in early August to
review the data, discuss variances, and clarify the Board's
expectations. Following this, all plans will be offered the
opportunity to submit final best offers by August 15.
Plans that are not able to justify the final premium rate
increase submitted will be notified that the Board will be advised
to drop that plan from the program. The Board will notify plans
of its final decision by September 1.
The Board will contact each plan before their final bids are in
place thus providing them with a fair chance to either demonstrate
the validity of their bids or to adjust their bids to meet what
is supported by the claims data. The procedural changes will strengthen
the Board's position in the negotiation process and help to
ensure that the employers and their employees pay only their fair
Currently, 18 HMOs and four fee-for-service plans participate in
the Group Health Insurance program. Although the Department does
not anticipate any changes to the number of plans participating
in the program for 2002, with this change there is the likelihood
that some HMOs may not agree to adjust their bids and will be dropped
from the program.
Questions about this information can be directed to the Employer
Communication Center at (608) 264-7900.