DCH board divided, but approves change in employees’ insurance plan

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A divided state Board of Community Health gave final approval Thursday to a change in the State Health Benefits Plan (SHBP) that provides health insurance coverage for 670,000 teachers, state employees, retirees and dependents.

With the board’s approval of the plan design, DCH Commissioner Clyde Reese will sign a contract turning over administration of the $3 billion insurance plan to Blue Cross and Blue Shield of Georgia, replacing current administrators Cigna and United Healthcare.

“We’re going to issue a notice of award and execute the contract,” Reese said after the board meeting.

The competition was fierce among insurers for the health plan, one of the largest in Georgia, and stirred up a high level of legal and political controversy.

The Community Health Board, which normally makes policy decisions by routine unanimous votes, was also split over the issue. Just five of the board’s nine members, a bare majority, voted to approve the changeover.

In addition to switching to Blue Cross, the State Health Benefits Plan will cut off funding for elective abortions – plan participants could only get coverage for abortions when the life of the mother is threatened.

That abortion coverage exclusion reflects a promise made earlier this year by Gov. Nathan Deal, who will face Republican primary opposition when he runs for another term next year.

The anti-abortion provision could also lead to problems with the federal government. DCH officials said the plan will comply with all the guidelines of the federal Affordable Care Act, but Reese conceded he did not know if the abortion exclusion would conflict with Obamacare.

“It’s certainly an emotional issue,” Reese said when questioned by reporters. “I think the department has the discretion to do this.”

Under the new contract, Blue Cross and Blue Shield will administer the SHBP while Express Scripts will be the pharmacy benefits manager and HealthWays will be responsible for wellness programs.

DCH is also seeking bids for an HMO to provide additional coverage options for plan participants living in the Metro Atlanta area – this would comprise 10 percent or less of the total contract.

That provision prompted a lawsuit from attorneys for Cigna and United Healthcare that attempted to block the entire contract award, but Fulton County Superior Court Judge Jerry Baxter declined to hold up the contract.

There had been concerns about turning over the administration of the plan to a single company, Blue Cross and Blue Shield, that already covers a large portion of Georgia’s private market for health insurance.

“Consumer choice is important in building an affordable, accessible and sustainable healthcare system, so it’s unfortunate that SHBP plan members such as teachers, state employees and retirees will no longer enjoy competition in the State Health Benefit Plan,” United Healthcare spokesperson Tracey Lempner said.

Reese said the contract includes a provision that prohibits Blue Cross from requiring providers to buy other products from the company as a condition of being allowed to participate in the plan’s network of providers.

SHBP Director Trudie Nacin said Blue Cross “had the most favorable rates and discounts for our plan” and added that DCH hopes to save as much as $200 million by converting to a single administrator.

“We have had single providers (for the plan) in the past,” board member Clay Cox said. “The savings could be significant.

As for concerns that there will be fewer choices with just one plan administrator, Reese said, “Choice is a matter of semantics and how you think about it . . . we think choice exists in this proposal.”

© 2013 by The Georgia Report

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Tags: Blue Cross , Cigna , Clyde Reese , DCH , State Health Benefits Plan , United HealthCare