For Immediate Release
August 29, 2007
Strategies Keep Health Insurance
Program Costs in Check
MADISON, (Wis.) – Health insurance premium rate increases
for members covered under the Group Health Insurance Programs will,
for the fourth consecutive year, average in the single digits next
year. The Group Insurance Board (Board) made the announcement at
yesterday’s meeting. The program covers more than 230,000
state and local government employees, retirees, and their dependents.
The rate increases for the health plans participating in the program
in 2008 will average less than 7%. Rates may be higher or lower
for some local government employers, explains David Stella, Deputy
Secretary of the Department of Employee Trust Funds (ETF), “but
overall, this is very good news for our program participants and
employers. The fact that rate increases have been held down without
cutting benefits can be directly attributed to the cost containment
strategies set in place four years ago. It’s a significant
Initiated by the Board and the governor, the strategies included
adopting for state employees a three-tiered structure for premium
contributions, incorporating quality measures into the health plan
negotiation process, and providing prescription drugs through an
innovative, transparent, prescription drug purchasing pool, operated
by Navitus Health Solutions, a pharmacy benefit manager.
“The state’s tiering process uses consumer pressure
to keep costs down and quality standards high without resorting
to benefit cuts or shifting costs through higher copayments,”
said Tom Korpady, administrator of ETF’s Division of Insurance
Services. “The health plans and providers are sensitive to
this pressure and have responded by holding down premium increases.”
One notable change for next year includes the expanded availability
of Tier 1 plans to most areas of the state, especially in the northwest
counties. This is particularly good news for state and university
employees in Pierce and St. Croix counties.
In addition, all of the health maintenance organizations participating
in the program for state employees will offer some dental benefits
next year. Eight plans in the local government program will offer
employees dental coverage through nine networks.
Monthly premiums will increase by about 7% for the approximately
10,200 participants in the state’s Medicare Plus $1,000,000
plan. This group experienced premium decreases over the past three
years, but higher than expected medical costs in 2007 required a
modest premium increase for 2008.
- The Department of Employee Trust Funds 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 (SMP) are self-insured
by the Board and administered by WPS Health Insurance.
- The pharmacy benefit is self-insured by the Board and administered
by Navitus Health Solutions.