Press Release

For Immediate Release
August 29, 2006

Contact:

Tom Korpady,
Administrator, Division of Insurance Services
(608) 266-0207

2007 Rates

Group Insurance Board, ETF Keep Public Employee Health Insurance Costs in Check for Third Straight Year

MADISON, (Wis.) – Strategic efforts developed to control costs and improve quality of care and service delivery continue to bear fruit: Health insurance premium rate increases for members covered under the state’s Group Health Insurance Programs will average in the single digits for the third year in a row. The Group Insurance Board (Board) made the announcement at today’s meeting. The programs cover more than 200,000 state and 30,000 local government employees, retirees, and their dependents.

Next year’s rate increases for the health plans participating in the program will average about 7.4% for state employers and 5.9% for local employers. Rates will remain unchanged for the approximately 400 participants covered under the self-insured plan for local government employees and retirees.

In addition, monthly premiums will decrease by 5% for the approximately 10,200 participants in the Medicare Plus $1,000,000 plan. This is the third year in a row members in this plan, who pay the entire premium, have seen a decrease. Factors contributing to the decrease not only include the implementation of the Pharmacy Benefit Manager (PBM) program, but also favorable prescription drug and medical claims experience, and the new Medicare Part D prescription drug coverage.

“This is very good news for all of our members and employers -- local as well as state,” said Eric Stanchfield, secretary of the Department of Employee Trust Funds (ETF). “That we are able to provide these rates through innovative cost-containment strategies set in place three years ago, and not by cutting benefits, is a significant achievement,” he said.

The strategies, initiated by the Board and the governor and implemented by ETF, included:

• adopting for state employees a three-tiered structure for premium contributions
• incorporating quality measures into the health plan negotiation process
• providing prescription drugs through an innovative, transparent, prescription drug purchasing pool operated by Navitus Health Solutions, a PBM.

Additional information on the State of Wisconsin Group Health Insurance Program

• Total estimated health insurance premiums (as of January 2006): $1.03 billion
  ($750 million state active employees; $138 million state retirees; $143 million local employees and local retirees).
• ETF and the Group Insurance Board have statutory authority for program administration and oversight. Health maintenance organization (HMO) plans follow the Board’s guidelines for eligibility and program requirements. All HMOs offer a prescribed benefit package called Uniform Benefits.
• HMOs participate in an annual, competitive premium rate bid process.
• The Standard Plan and State Maintenance Plan are self-insured by the Board and administered by WPS Health Insurance.
• The pharmacy benefit is self-insured by the Board and operated by Navitus Health Solutions.