GIC launches health plan procurement process

Weekly Update 4/1/2022: Every five years the state’s Group Insurance Commission (GIC) is required to rebid all health insurance, pharmacy, dental, and life insurance contracts. FY23, which begins July 1, 2022, marks the final year of the current 5-year contract cycle for all GIC health insurance and pharmaceutical drug plans.

Today we anticipate the release of the first component of the GIC’s FY24 procurement – the Request for Response (RFR) for the health insurance plans. The pharmacy plan RFR will be released in early June.

Watch today’s video report here!

In anticipation of the procurement process, our Association has engaged in an ongoing dialog with the GIC to ensure that our members’ point-of-view is fully considered BEFORE any decisions are made. Thankfully, the GIC has been very responsive in outreach with our members.

As you might know, GIC Executive Director Matt Veno has been a frequent guest at our Tele-Town Hall Meetings. Matt values the input he and his staff have received from retirees, which has helped to inform the process of laying out the procurement goals and guidelines for the RFR.

For instance, the GIC has ruled out a move toward high deductible health insurance plans. While the GIC’s non-Medicare health insurance plans do carry a $400 or $500 annual deductible, the plans are not considered “high deductible”. Annual deductibles under these types of plans typically range from $2,000 to $5,000 – or more. They tend to be geared toward high income workers and certainly not retirees.

Recent studies have shown that if wrongly applied, high deductible plans can quickly lead to higher overall healthcare costs. The reason is because enrollees avoid seeking needed or even critical care, due to high out-of-pocket costs. To their credit, the GIC has recognized this fact and opted not to open the door to high deductibles.

Another key aspect of the RFR approach is that the GIC is not seeking to eliminate or consolidate plan offerings as a matter of policy. This is the direct opposite approach to what was taken during the last procurement process, where an attempt was made to consolidate plan offerings. This caused considerable pushback from Mass Retirees and labor, which led to the GIC being forced to change course at the 11^th hour.

In terms of what we do anticipate being proposed and considered:

• Additional options for retirees living outside of Massachusetts, with a possible nationwide PPO.
• A national group Medicare Advantage Plan, with an open network. This type of plan would likely be offered in addition to traditional Medicare supplement plans, such as UniCare’s OME Plan.
• We believe that most, if not all, of the GIC’s current insurance plans will submit bids. Blue Cross Blue Shield has not been a GIC vendor in over 30-years and did not submit a bid in 2017. It is unclear if they intend to bid this year.
• National health insurance carriers such as Aetna, Humana, and United Healthcare – to name a few – may submit bids for the first time in recent memory.
• Pharmaceutical RFR being released in June. Unclear as to what approach the GIC may take in terms of retaining or changing the current model of separate Pharmacy Benefits Managers for Medicare and non-Medicare retirees. However, it is unlikely that we would see a change simply for the sake of change alone.

Once the RFR is released, vendors have 45-days in which to submit a bid. The GIC will then spend the summer evaluating and scoring proposals, before the selection process begins sometime around Labor Day. However, we do not anticipate any public announcements until October – at the earliest.

As information becomes available, we will certainly keep our members well informed. And remember, the policies and plan design decisions implemented by the GIC can quickly be implemented at the local level for municipal retirees. These developments require close monitoring.

Watch the video report by clicking the play button below.