Bill proposes two health insurance providers for the government
A new bill has been introduced to allow for two insurance companies for the government's health insurance deal, its single largest annual contract.
Sponsors Sen. Jose "Pedo" Terlaje and Speaker Tina Barnes say the current single provider system didn't result in the savings they expected, and they believe providing for a second competitor will be more beneficial for employees.
The current single provider contract became law about four years ago, and this year resulted in a new health insurance company to GovGuam, U.S. mainland based Aetna. But co-sponsor Speaker Barnes says the intent of the law was to save the government money, except that isn't the case.
"There really wasn't a savings," Barnes said. "We anticipated, or we projected there would be a realization of millions of dollars. And today if I'm not mistaken, and I can be corrected, but we're looking at having to pay an additional, if I'm not mistaken, an additional $38 milliion."
Co-sponsor Sen. Pedo Terlaje says he's heard a multitude of complaints about the current system, which he says has resulted in higher premiums, and lower care standards. Barnes concurs.
"Sometimes having the most economical insurance provider is not having the most beneficial because there are a lot of coverages that are not included with the most economical," she said.
Under the proposal, the government would specify the minimum terms it wants, and it's up to the insurance providers to come back with their coverage plans.
"The government, as the insurance negotiation team, will work with the different insurance providers on their offers," Barnes said. "So again specifications go out, the RFP goes out, and based on that who can compete to provide the government of Guam for the employees and retirees, the best plan to meet the needs of the government of Guam."
Administration Director Edward Birn said GovGuam simply followed the law and chose the most economical and beneficial policy among the bidders.
He couldn't comment on savings since medical costs increase each year. He said costs may not be guaranteed to decrease, but increases can be minimized.