Changes Would Begin July 1st
DECEMBER 6, 2018: Today, the state’s Group Insurance Commission (GIC) began the public process of establishing plan design and setting premiums for Fiscal Year 2020. Since all current GIC insurance plans were re-contracted in FY19, Mass Retirees does not anticipate major plan design changes for the coming year.
Changes Would Begin July 1st
DECEMBER 6, 2018: Today, the state’s Group Insurance Commission (GIC) began the public process of establishing plan design and setting premiums for Fiscal Year 2020. Since all current GIC insurance plans were re-contracted in FY19, Mass Retirees does not anticipate major plan design changes for the coming year.
To be clear, the GIC administers health insurance coverage for all state retirees and active employees, along with some 38 municipalities and several dozen school districts. All other local retirees receive their health insurance coverage through the city or town from with they retired. However, policy set by the GIC very often takes root at the local level and impact municipal and teacher retirees.
While work began within the GIC on the FY20 plans many months ago, the December meeting marked the first-time details were discussed in open meeting. GIC officials, along with consultants from Willis Towers Watson (WTW), cautioned that today simply marked the start of the public process of setting benefits and rates for the coming year.
Currently, the GIC plans to unveil a detailed recommendation for plan design changes at its January 17, 2019 meeting. Then on February 7, the Commission would approve plan design. A vote on FY20 premium contribution prices would then take place in late February, well in advance of annual open enrollment in April. Any changes would then take effect at the start of FY20 on July 1, 2019.
Outlook and Potential Changes
According to a WTW survey of 550 large employers across the country, the national trend indicates increases in healthcare costs for 2019 ranging from 5-6% on average. A similar survey of public sector employers shows a slightly lower average increase of 4.5%. When compared to the latest CPI-U for 2018 (2.8%), national healthcare inflation trends some 2-4% higher than the CPI.
As has been the case for more than a decade, the GIC’s cost trends remain below national averages – but still outpace inflation. Again, cautioning that the report represents early stages of analysis, WTW projects that the GIC faces cost increases ranging from 3-7% on average across all 6 carriers for FY20. Specific costs will vary by insurance carrier, as well as Medicare vs. non-Medicare plans. Generally speaking, Medicare costs tend to increase at a lower rate of inflation than non-Medicare plans.
Throughout today’s meeting, GIC Commissioners engaged in a robust discussion and asked probing questions of GIC staff and the consulting team.
“It is encouraging to have witnessed such an open and detailed discussion of where things are at, what is driving cost increases and what can be done going forward. And the fact that these conversations are taking place in public, relatively early in the process, is very helpful,” says Association Legislative Director Shawn Duhamel. “Mass Retirees appreciates the role of Jane Edmonds (retiree representative) plays on the Commission in making sure that the potential impact any changes might have on retirees is well thought out.”
While multiple commissioners participated in today’s debate, asking smart probing questions, the contributions made by the Commission’s health economist stood out. Anna Siniako was appointed to the Commission by Governor Baker less than a year ago. The Harvard faculty member holds a Masters in Public Policy and a PHD from Harvard’s School of Public Health. According to her faculty bio, Siniako’s work has focused heavily on “an effort to understand consumer decision-making in health care settings, and the implications of consumer and other stakeholder behavior for policy that aims to improve the quality and efficiency of the U.S. health care system.”
“Both Commissioners Edmonds and Siniako asked very specific questions regarding the impact of any potential plan design changes on enrollees. One point that was made is that any changes in benefits or out-of-pocket costs must be clearly explained to members in advance,” said Association General Counsel Bill Rehrey. “Right now we do not know exactly what the plan design changes will be, but they did outline some areas of interest. And believe it or not, benefit enhancements are also under consideration! One example is lowering the mental health copayment.”
One area of focus is standardizing benefits across all GIC plans, while also incentivizing enrollees to also seek treatment at lower cost facilities.
An example is high tech imaging tests such as MRI and CAT scans. Costs for such procedures vary significantly depending on the location of the service. The GIC is considering tiered copayments for such tests depending on the location. For instance, the copayment for an MRI at a Boston teaching hospital could be $200, while the same test scheduled at a community facility would be just $75.
The GIC was careful to point out that emergency procedures would not be subject to the higher copayment. This type of change would be focused on routine or pre-scheduled appointments that can be performed at a less expensive facility for the same level of treatment.
“We’re at a new point in healthcare whereby patients need to play a direct role in managing their own services. For better or worse, accessing healthcare has become similar to any other consumer activity where we are forced to make active choices and, at times, shop around for the best deal,” continued Duhamel. “Of course this should not apply to emergency services. But for routine care and pre-scheduled appointments we have to become more involved. If we want to gain control over costs, while also maintaining choice and quality then we need to find new ways of doing things.”
Mass Retirees will continue to directly monitor all developments at the GIC and will report to our members as information becomes available.