Arkansas lawmakers have approved new health insurance premium rates for state employees and public school employees. The Employee Benefits Division Oversight Subcommittee on Wednesday took action allowing lower rates to take effect, following last week’s approval by the State Board of Finance.
In the next calendar year, state employees will be expected to pay $172 a month, while public school employees will pay $221 a month, according to a spreadsheet provided by the Employee Benefits Division (EBD). There are different rates for employees who include their spouses or children on their plan.
Concerns about United Healthcare
Former Superintendent of Lafayette County School District Winston Simpson, who is now retired, shared his concerns with lawmakers about the United Healthcare’s Medicare Advantage Plan.
A contract had been approved by legislators this summer after it was found lawful. Last month, Benister filed an objection claiming United Healthcare was unfairly awarded the contract with the state.
“The [request for proposal] requires that any vendor be a 4 star or more vendor, Benister is not a 4 star vendor,” Mitch Rouse, director of the Office of Transformation and Shared Services, said when asked about the disqualification by lawmakers in a previous meeting.
Jake Bleed, director of the EBD, has said the Medicare Advantage through United Healthcare can help save the state money, while keeping benefits for employees the same.
In his memo, Simpson said he was worried about the plan denying some coverage. He cited a study done by the US Department of Health and Human Services that found 18% of payments denied by Medicare Advantage would have been approved by Medicare.
Kirsten Schatten, strategic consultant for the Segal Group, said the human resources consulting firm, which was hired by the state for $611,000, has looked into the possibility of denials by in-state providers, which refers to places like hospitals, pharmacies and individual doctors.
“There’s a very high percentage, high 90’s, I don’t exactly remember, it may be 99, are either in network or accept out-of-network basis,” Schatten said.
According to GoodRx Health, when an insurance company is accepted by certain providers the provider will provide their services at a discounted price, which is referred to as in network. Out-of-network refers to insurance companies that don’t have contracts with providers to get a discounted rate.
Schatten said United Healthcare is working with providers who don’t accept the plan. When asked by Sen. Linda Chesterfield, D-Little Rock, about what action can be taken if the state doesn’t like the plan, Bleed responded by saying the contract has clauses for that scenario.
“We will be watching that as an issue. We will certainly make use of the performance guarantees and other protections we have in the contract in the event that this goes wrong,” Bleed said.
Bleed has said there is a clause in the contract with United where the company has to report how much it is spending on benefits for members.
“If they keep too much, they pay it back to us. I think we have really good guardrails to make sure that the savings don’t result in less benefits for our members,” Bleed told lawmakers last month.
Bleed has also said employees will have the option of choosing to be covered by Medicare Advantage. Enrollment will begin in October and employees will have the option to opt out of the plan and back to their original plan if they don’t like it.
In an interview with KUAR News, Simpson said another concern with Medicare Advantage is the federal government doesn’t provide enough oversight. He hopes the Office of Employee Benefits Division will fill in that gap.
Pharmacy Benefits Managers
The state is also looking to add a pharmacy benefit manager (PBM) as a way to save money. According to the Commonwealth Fund, PBMs are companies that help negotiate drug prices for health insurers and large companies.
During Wednesday’s meeting, lawmakers were scheduled to discuss the process of finding a PBM, but the discussion was cut short.
Prior to ending the meeting, Rep. Jeff Wardlaw, R-Hermitage, said the Segal Group felt left out of the process of finding a PBM. The firm reached out to the Bureau of Legislative Research (BLR) about its concerns, which was relayed to Wardlaw and Sen. Terry Rice, R-Waldron.
To discuss the issue, a copy of an email was shared among lawmakers. Prior to discussing the email, Rouse warned lawmakers certain information couldn’t be discussed while the bidding process is taking place.
“There has not been a vendor that has been selected for this PBM, under procurement law we can not discuss the details of what’s been submitted,” Rouse said.
Wardlaw followed Rouse’s warning by calling a break to speak with Jillian Thayer, legal counsel for the BLR.
Wardlaw said in an interview after the meeting he wasn’t able to speak about what information was in the email that caused the meeting to end. He said the email was the reason for the meeting ending early.
Rouse said his office will restart the bidding process to find a PBM.
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