Department of Employee Trust Funds
Revised May 14, 2015
Proposed Changes to Health Insurance Program for 2016
The Group Insurance Board is working with Segal Consulting to identify ways to improve health outcomes and increase the efficient delivery of quality health care for the more than 240,000 state employees and their families in the State of Wisconsin Group Health Insurance Program. Segal presented its first report, outlining preliminary recommendations for program changes beginning in 2016, earlier this week.
The legislature granted the board expanded authority in 2013 to provide additional oversight and strategic direction for the health insurance program. As a result, the board identified the need for a benefits consultant and retained Segal for research and analysis, and to recommend:
- Benefit and program design changes for 2016, initial observations for long-term program changes, and an evaluation of resources for future data management measurement. Report due in March 2015.
- Benefit and program design changes for 2017 and beyond. Report due in November 2015.
In addition, the 2015-2017 State Budget currently includes a provision requiring the board to work with Segal to identify cost savings over the next two years.
Highlights from the March 2015 Report
Segal compared the group health insurance program to those in other Midwestern states, including Minnesota, Michigan, Iowa, Illinois and Indiana. In general, Segal found Wisconsin has a rich benefits package, one of the highest premium costs and competitive pharmacy drug pricing.
Wisconsin needs to start planning for the implementation of the Affordable Care Act Excise Tax in 2018. Converting the health insurance program from an HMO model to a self-insurance model may help the state avoid ACA taxes and fees, as well as generate cost savings. The feasibility of self-insurance needs to be further explored for possible implementation in 2017 or beyond.
Here are some of the proposed changes for the health insurance program for 2016:
- Introduce a deductible and increase the maximum out of pocket for the Uniform Benefits offering
- Increase the deductible and maximum out of pocket for the Standard Plan
- Increase the health savings account contribution for the high deductible health plan
- Change office visits from coinsurance to a copay
- Keep generic drugs affordable ($5 copay) and shift to coinsurance for brand drugs:
- Level 2—20% copay ($50 maximum)
- Level 3—40% copay ($150 maximum)
- Level 4 Preferred—$50 copay
- Level 4 Non-Preferred—40% copay ($200 maximum)
- Continue to self-insure the Standard Plan and State Maintenance Plan, as well as pharmacy and dental benefits
- Consider switching from single and family only to a 4-tier structure
- Investigate premium-based incentives for participation in the Well Wisconsin Program
- Establish uniform metrics to measure health plan performance
In April ETF will convene a study group to review recommendations and provide feedback for consideration by the board. The study group will include representatives from Wisconsin Retirement System employers, the Wisconsin Association of Health Plans, Pharmacy Society of Wisconsin, ETF staff and others.
Final recommendations for changes to the health insurance program for 2016 will be presented to the board for review and approval on May 19.