Senate panel eyes state group health insurance plan, premiums

Medical grant money — use it or lose it.

State employees haven’t had an increase in their health insurance premiums in more than 15 years, but that could change as a Senate panel begins to take a deep dive into costs associated with the state group health insurance plan.

Sen. Jeff Brandes, chair of the Senate Governmental Oversight and Accountability Committee, asked Division of State Group Insurance Director Ryan Stokes whether the state had consultants under contract who could make recommendations on ways the state could lower its health insurance costs and alter the current premium structure to “incentivize” state employees to enroll in high-deductible health insurance plans.

Brandes’ and other members of the committee’s comments came on the heels of Stokes’ presentation, which showed the state has shouldered 100% of the increases in costs for health insurance and employees have borne none of the expense.

Stokes’ chart showed family premiums for health insurance coverage on June 30, 2005, were $10,004 The employee’s contribution was $2,160 and the state contributed the remainder.

As of July 1, the annual family premium for the state group health insurance plan was $21,973, of which the employee is still responsible for $2,160.

“As health care costs increase over time, premiums also have to increase,” Stokes said, explaining the chart to the committee members. “You can see employee contributions have remained unchanged for the past 15 plus years with the employer absorbing any cost increases to the program.”

Brandes seemed dismayed by the information.

“So we haven’t increased premiums for employees for the past 15 years?” Brandes asked.

Committee member and Senate chief budget negotiator, Sen. Kelli Stargel asked whether the division has compared the benefits and costs of the state group health insurance plan to other states and how Florida’s plan fares. She also pressed as to whether there was any analysis of the state group plan compared to other large employers in Florida.

There have been studies in the past, Stokes said, but he told Stargel he couldn’t recall the findings.

Brandes, though, offered an answer to the question.

“Based on my experience, the out-of-pocket for employees is extremely low,” Brandes said.

Florida’s state group health insurance is estimated to have cost $2.8 billion this past year. As of June 30, there were 362,290 people (175,046 state employees) covered by the state group health insurance plan. About 47% of the employees are enrolled in the preferred provider organization, or PPO plans, and 52% are enrolled in HMO plans.

The state group plan offers employees access to high-deductible PPO and HMO Plans. Data from the state show that as of June 30, just 3% of those covered under the plan choose high-deductible plans.

“What kind of advertising do we do?” Brandes said noting that costs for the state are reduced when individuals enroll in the high-deductible plans. “What are we doing to advertise or to explain to individuals who join the state plan not only their options, but the benefits of joining a high-deductible plan?”

The state contributes the same amount of premiums whether the employee enrolls in the high-deductible plan or a traditional plan. The cost difference between the options is borne by the employee through higher or lower premiums.

Sen. Gary Farmer asked that the division work to gather information about state employees’ salaries and to have the information to include in presentations going forward.

“In making these decisions, the disposable income available to these employees is a factor,” Farmer said.