Mixed testimony on Bill 513 - KUAM.com-KUAM News: On Air. Online. On Demand.

Mixed testimony on Bill 513

by Mindy Aguon

Guam - There were mixed feelings expressed today by members of the island's health insurance community on a bill that claims to be the solution to establish health insurance for Fiscal Year 2013. Bill 513 seeks to be the solution to the government coming up with health insurance for the coming fiscal year. 

Companies would submit sealed bids and the benefits offered by the bidders would be the same, only the price, service, and network of physicians would be different. But health insurance carriers have different takes on the real intent of the bill. Calvo's SelectCare plan administrator Frank Campillo told KUAM News, "It rewards companies that did not comply with the requirements outlined in a well-defined RFP process while penalizing those that complied. All this is done under the disguise of stimulating competition and choice."

Campillo believes the measure sets a dangerous precedence and is another example of legislative interference. He also referred to a legislatively commissioned study on health insurance benefits conducted by Lewis and Ellis, adding, "Ii concluded that GovGuam would possible get better rates, benefits and services through one insurance provider. The theory of higher rates with a single provider or the theory of savings yield with multiple providers becomes a pointless issue with the implementation of PPACA medical loss ratio requirements and the current participating GovGuam contract."

Staywell acting president Frances Santos is currently off-island, but his testimony was read by Gus Sablan, who said the company supports the intent of the bill but is proceeding "with caution" with regards to the structure of the proposed invitation to bid and getting a better understanding of the proposed premium calculation. "In most circumstances in which multiple carriers are participating in a group benefit program, adjustments are made to address the limited risk pool," he stated. "This may result in a total higher than the $69 million outlined in the bill."

Senator Ben Pangelinan read TakeCare CEO Jeff Larsen's written testimony in support of the bill. Larsen said the existing RFP process is "flawed and chaotic". Larsen wrote, "Bill 513, by allowing for a competitive sealed bid process in compliance with the Open Government Law of Guam, would promote real competition, expanded consumer choices, using reasonable means will drive a fair and expedited procurement for health insurance services."

TakeCare also submitted a substitute version of Bill 513, making clerical changes and others such as making the chief procurement officer of the General Services Agency the chairperson of the Guam Health Insurance Negotiating Team. They also recommend putting the Department of Administration director as a member of the team instead of removing her completely as Pangelinan's bill seeks to do.

The DOA director also submitted her written testimony in opposition of the bill, which was read by Senator Sam Mabini. Benita Manglona's written comments stated, in part, "We do not agree with the proposed process to procure health insurance for Fiscal Year 2013, including the caps set, the award of contract to all qualified carriers without aggressive negotiations and the timeframes set and the projected overpayment of premiums cited."

Campillo added, "The solution for the procurement of health insurance benefits for GovGuam is to leave the process alone."

NetCare administrator Jerry Crisostomo also submitted written testimony supporting the intent of the bill, but suggested the wellness and fitness requirements be removed as free utilization of gyms and child care services could increase premiums unnecessarily. Crisostomo added that NetCare strongly recommends the government consider moving to a self-funded program to save a considerable amount in administrative expenses.

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