November 18

(Madison, Wis.) - The Wisconsin Association of Health Plans is recommending careful analysis of the State Group Health Program recommendations included in Segal Consulting's November 17 report to the state's Group Insurance Board. The report presents a couple dozen recommendations that will restructure the State Group Health Program and ultimately remove it from Wisconsin's competitive health insurance market.

"Wisconsin's State Group Health Program is unique, and it works," said Nancy Wenzel, CEO of the Wisconsin Association of Health Plans. "Which is why any major changes proposed for the program must be considered carefully, especially where they have the potential to affect consumer choices, local economies and Wisconsin's vibrant health insurance market."

The State Group Health Program serves roughly 250,000 state employees, retirees, local government employees, and their dependents, which represents approximately 14 percent of Wisconsin's competitive health insurance market.

Studies have shown a competitive health insurance market results in greater access to lower cost health insurance. Wisconsin has the most competitive health insurance market in the country, according to a Kaiser Family Foundation analysis of health insurance competitiveness.

In the State Group Health Program, Wisconsin uses an effective market competition model giving consumers multiple choices of regionally distributed health plans competing to provide higher quality health care at a lower cost. The model saved the state more than $1 billion over a five-year period. And over the next two years, the state is estimating it will save $85 million through a combination of health benefits changes and the competitive bid/negotiation process that is part of the program.

"Competition matters," said Ms. Wenzel. "The Segal recommendations will clearly affect competition in Wisconsin's health insurance market, especially the recommendation to take the State Group Health Program out of the fully insured market and bring the state into the insurance business through self-funding."

The Segal report recommends more than self-funding, including the consolidation of the current 17 competing health plans into two or three health plans in each of three geographic regions. Self-funding, however, is an explicit objective beginning in 2018.

"Eliminating 14 percent of Wisconsin's competitive health insurance market through self-funding would deal a serious blow to Wisconsin's vibrant health insurance market," said Ms. Wenzel. "It will create disruption and instability in local markets, limit the ability of state employees to choose their own doctors and place the state at greater financial risk by turning fixed costs into variable and unexpected costs.

"Further, self-funding would require more government involvement at a time when citizens want less government," Ms. Wenzel said.

"More analysis of Segal Consulting's November 17 report is needed before any decisions are made," said Ms. Wenzel. "One thing that is clear, however, is self-funding the State Group Health Program is not the right answer for Wisconsin."

The Group Insurance Board is planning to discuss the Segal recommendations and possibly begin taking action at its February 17, 2016, meeting.

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