Many Cost Control “Options” Simply Cost Shifting
In response to growing concerns over a potential “fiscal cliff” that would seriously impair state budget spending, the state’s Group Insurance Commission (GIC) was tasked with developing options to reduce the agency’s budget for FY27. As we outline in our lead story on page 1, spending concerns stem from a combination of federal budget cuts, high inflation, and a slowing economy.
Complicating matters are rapidly rising healthcare costs, which are growing at a rate far surpassing normal revenue growth and resulting in greater overall budgetary pressure.
In response to intense pressure to control spending and reduce costs for FY27, the GIC presented a series of cost control options at the Commission’s November 20th meeting. To be clear, the options are NOT recommendations by the GIC staff or Commission. What was presented at the November meeting simply represent the current cost saving options on the table that are within the GIC’s legal authority to quickly implement for FY27.
For public retirees and employees not enrolled in the GIC, these changes can still impact you. State law allows municipal governments to enact the GIC’s plan design and out-of-pocket cost structure with little to no local bargaining. All public retirees and active employees are in this fight together!
Skeptical GIC Commissioners, “Address Cost Drivers”
Before outlining the details of what options are expected to be discussed by the 17-member Commission, we must point out that several GIC Commissioners publicly expressed their personal misgivings with many of the options now on the table. It is important to note that the concerns raised at November’s meeting did not solely come from those Commissioners who represent retirees and labor. Yes, Jane Edmunds (Retirees), Bobbi Kaplan (NAGE), and Dean Robertson (newly appointed MTA representative) each questioned the options presented and made a strong case as to why it is unfair to further burden enrollees with new costs.
But it was those Commissioners who represent the public and the business community who made equally impactful statements of the need to tackle the systemic causes of healthcare inflation and not engage in short term “band-aid” fixes that accomplish little beyond cost shifting onto enrollees.
Elieen McAnneny, who previously led the Mass Taxpayers Foundation, openly questioned officials from the Executive Office of Administration and Finance (ANF) on what steps the Administration is or plans to take to address the root causes of healthcare inflation.
Similarly, long-time Commissioner Tobey Choate, who has a strong healthcare administration background, indicated that the GIC’s focus should be on addressing network pricing and gaining control over unit cost.
Commissioner Tamara Davis, a private sector business-minded appointee of former Governor Charlie Baker, said it best when she referred to steps that our Association considers to be cost shifting as nothing more than a “band-aid”. Like several of her fellow Commissioners, Davis spoke to the need to address healthcare unit cost drivers.
“It is important to thank GIC Executive Director Matt Veno and his team, the 17-member GIC Commission, and the Healey Administration for the transparency they have brought to this process. The options outlined above, many of which are greatly troubling, are being discussed and considered in the public realm – not behind closed doors in secret as was often the case in the past,” comments Mass Retirees CEO Shawn Duhamel.
“This refreshing approach not only allows organizations such as Mass Retirees the ability to share our opinions, but will also help foster a broader and long overdue discussion amongst all stakeholders as to how we can collectively address the systemic cost drivers that have made our healthcare system increasingly unaffordable.”
As we have said, cost shifting and a band-aid approach are not solutions.
Plan Design Change Options For Discussion
- Increase Urgent Care and ER Copayments
- Remove the current 3 free mental health tele-health visits
- Limit Hearing Aid Coverage to once every 36 months
- Increase out-of-network coinsurance
- Implement uniform reimbursement for out-of-network care
- Increase PCP Copayment (non-Medicare)
- Increase Specialist Copayment (non-Medicare)
- Increase non-Medicare plan annual deductible
- No longer cover GLP-1 for weight loss in most instances
- Increase premium contribution split for active employee dental plan
from the current 10% to mirror the employee’s health plan contribution % - Increase premium contribution split for surviving spouses from the
current and longstanding 10% contribution to the same retiree % that
had been paid by the deceased spouse - Implement Prudent RX, a specialty drug program now utilized by many
public sector health plans