For Immediate Release
August 29, 2006
Administrator, Division of Insurance Services
Group Insurance Board, ETF Keep Public Employee
Health Insurance Costs in Check for Third Straight Year
MADISON, (Wis.) – Strategic efforts developed to control
costs and improve quality of care and service delivery continue
to bear fruit: Health insurance premium rate increases for members
covered under the state’s Group Health Insurance Programs
will average in the single digits for the third year in a row. The
Group Insurance Board (Board) made the announcement at today’s
meeting. The programs cover more than 200,000 state and 30,000 local
government employees, retirees, and their dependents.
Next year’s rate increases for the health plans participating
in the program will average about 7.4% for state employers and 5.9%
for local employers. Rates will remain unchanged for the approximately
400 participants covered under the self-insured plan for local government
employees and retirees.
In addition, monthly premiums will decrease by 5% for the approximately
10,200 participants in the Medicare Plus $1,000,000 plan. This is
the third year in a row members in this plan, who pay the entire
premium, have seen a decrease. Factors contributing to the decrease
not only include the implementation of the Pharmacy Benefit Manager
(PBM) program, but also favorable prescription drug and medical
claims experience, and the new Medicare Part D prescription drug
“This is very good news for all of our members and employers
-- local as well as state,” said Eric Stanchfield, secretary
of the Department of Employee Trust Funds (ETF). “That we
are able to provide these rates through innovative cost-containment
strategies set in place three years ago, and not by cutting benefits,
is a significant achievement,” he said.
The strategies, initiated by the Board and the governor and implemented
by ETF, included:
- adopting for state employees a three-tiered structure for premium
- incorporating quality measures into the health plan negotiation
- providing prescription drugs through an innovative, transparent,
prescription drug purchasing pool operated by Navitus Health Solutions,
Additional information on the State of Wisconsin Group
Health Insurance Program
- Total estimated health insurance premiums (as of January 2006):
($750 million state active employees; $138 million state retirees;
$143 million local employees and local retirees).
- ETF and the Group Insurance Board have statutory authority for
program administration and oversight. Health maintenance organization
(HMO) plans follow the Board’s guidelines for eligibility
and program requirements. All HMOs offer a prescribed benefit
package called Uniform Benefits.
- HMOs participate in an annual, competitive premium rate bid
- The Standard Plan and State Maintenance Plan are self-insured
by the Board and administered by WPS Health Insurance.
- The pharmacy benefit is self-insured by the Board and operated
by Navitus Health Solutions.