State employees could face much higher deductibles

5:44 AM, Mar 3, 2014   |    comments
Gov. Rick Scott and lawmakers are considering changes to the state-employee health-insurance program, including high-deductible health reimbursement accounts. / Glenn Beil/Tallahassee Democrat
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(Tallahassee.com) - Gov. Rick Scott and Florida lawmakers are eyeing changes to the state employee health insurance program - including the possibility of new high-deductible plans - that could affect more than 170,000 policy holders.

Scott, as part of his proposed $74.2 billion budget unveiled last month, asked the Department of Management Services to put in place options in the state group health insurance plan that would allow for health reimbursement accounts or HRAs, which typically feature high deductibles.

The proposal has prompted concern from the American Federation of State, County and Municipal Employees Council 79, which is at an impasse with the state over pay, health and other issues involving more than 50,000 state workers. But DMS officials say the HRA proposal would not replace current health benefits, only supplement them.

Lynda Lloyd, president of the Tallahassee Area Human Services and Professional Employees Local 3037, said few details have been offered about the HRAs. But the ones she and union members have seen are worrisome.

"I can say it has the potential to have a lot of problems," Lloyd said. "And we don't have enough information, for one thing. If they're trying to make this out as such a beneficial thing, why are they putting right out there ... that the employee will pay increased costs?"

State Rep. Richard Corcoran, chairman of the House Health & Human Services Committee, said during a Jan. 16 meeting of the committee that there are no plans to cut or increase the health-insurance program.

"Is there a way," asked Corcoran, R-Land o' Lakes, "that we can take this program, which is excellent, and give our state employees even more control and more benefits (so) they're making their decisions without sacrificing one iota of their health-care quality outcomes that they've been able to achieve?"

Scott's proposal calls for DMS to develop a "budget-neutral" plan that would include "increased employee cost-sharing."

DMS' plan is due July 1. Statewide implementation would begin Jan. 1, 2015.

The HRAs, like health savings accounts or HSAs, are known as consumer driven health plans, which are designed to encourage participants to spend their money on health care more wisely, said Tony Holmes, a partner with Mercer Health & Benefits LLC, during the House Health & Human Services Committee meeting.

"Typically, these plans will increase the deductible," Holmes told lawmakers. "And obviously if you increase the deductible, the plan's going to pay less. So there's an interim savings. But the concept is not to take those savings and cut benefits. It's let's redeploy these dollars ... and let's give it back to the people in ways that will make them better consumers."

The savings from the high deductibles could be given back to employees in the form of lower-priced premiums or contributions into accounts that could be used immediately on health care, Holmes said. Scott's proposal calls for $600 to go into the accounts each year to cover various medical expenses.

DMS spokesmam Ben Wolf said the HRAs would not replace current health-insurance offerings.

"The HRAs are a benefit extension within the state employees' current health insurance offerings designed to give employees more flexibility when making decisions about their health care," he said.

Hector Ramos, regional director of the AFSCME Council 79, said that for the state to come up with the $600 for each account, it will have to raise deductibles and co-pays for employees, which would reduce the premium amount the state pays but not reduce employees' share.

Currently, state workers pay a monthly premium of $50 a month for single coverage and $180 a month for family coverage, with the state paying $591 and $1,264, respectively. Ramos said under the governor's plan, co-pays for doctor visits could increase from $30 to $70 and deductibles could increase from $500 to as high as $2,000.

"The amount is unknown since the governor's representative at negotiations had no idea," Ramos said.

The state already offers Health Savings Accounts through the HMO Health Investor and PPO Health Investor plans. However, few state employees - a little more than 1 percent of them - are enrolled in the investor plans. Most opt for the HMO Standard or PPO Standard plans, which have co-payments and lower deductibles.

Matt Puckett, executive director of the Florida Police Benevolent Association, said the organization is interested in hearing more about the HRAs, which he said seems so far to be a helpful benefit.

"Overall, we are still concerned about increases to premiums," he said, "and we plan to work with the Legislature to prevent increases."

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