State Board Votes To Further Explore Self-Insurance

Consultants Have Offered Differing Opinions On Whether Switch Would Result In Savings


Wisconsin’s Group Insurance Board has agreed to explore having self-insured health plans for state workers. Members voted unanimously Wednesday to ask for bids from companies to help the state transition away from its current model.

With self-insurance, the state would pay medical benefits for state workers directly instead of buying insurance from HMOs. Two different actuaries previously came up with differing opinions on whether that model would cost or save the state money. One consultant, Deloitte, said self-funding could cost the state $100 million. The other one, Segal, predicted the switch could save the state $42 million.

Insurance board member Herschel Day said that ambiguity needs to be resolved, and that getting bids is a way to find out more information.

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The Wisconsin Association of Health Plans, which represents most of the HMOs insuring state workers, opposes self-insurance. Gov. Scott Walker has promised to spend any savings from the hypothetical transition on public education, but the association asserts that those savings wouldn’t happen.

The Department of Employee Trust Funds said 46 states partially or totally self-insure. Wisconsin currently self-insures pharmacy, dental and a small portion of health insurance coverage.

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