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State Workers’ Health Insurance Premiums To Increase 1.6 Percent Next Year

Insurers Say Premiums Reflect Competitive Market, Argue Against Switch To Self-Insurance

By
Morgan (CC-BY)

State workers will see their health insurance premiums go up less than 2 percent next year.

Tuesday, the Group Insurance Board approved an increase in premiums of 1.6 percent for the 17 HMOs that cover medical claims for 250,000 state and local government workers and their family members. That increase is less than a third of what large employers nationally are expected to pay.

The companies providing Wisconsin’s insurance plans say the modest increase shows the state should stick with its current system, and not switch to a self-funding model. Gov. Scott Walker, along with some state lawmakers and other officials have been pushing that option in an effort cut costs, but some experts say it could actually end up costing the state more.

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Phil Dougherty with the Wisconsin Association of Health plans, which represents 11 of the 17 HMO’s covering state workers, warned that a switch would be “risky” for the state.

“Why would anyone want to go with an unproven, risky choice for the state when we have a model that’s been proving itself cost-effective year after year,” he said.

A move to a self-insurance model would mean HMOs in the association would lose state business. The state is considering doing so as early as 2018.

Last month, the state put out a request for bids to oversee a self-insurance model in which the state would take the financial risk and pay medical claims directly. Consultants have estimated the financial impact could range anywhere from $42 million in savings each year to $100 million more in costs per year.

Walker has said potential savings could fund education initiatives.