Some schools, authorities may quit state health plan

About a dozen state authorities or school districts have inquired about withdrawing from the state employee health plan due to higher costs, officials said Thursday.

One state authority, the Georgia World Congress Center, with 487 employees, already plans to leave the state plan Jan. 1.

The moves come as the Department of Community Health, facing shortfalls, has raised the costs of coverage for its member employers and their employees.

The State Health Benefit Plan has faced “some tough times,’’ including having to shrink a deficit of more than $800 million, Community Health’s commissioner, David Cook, told the agency board Thursday.

School systems especially are being charged more, particularly to cover their non-certificate personnel — administrative assistants, custodians, bus drivers, cafeteria workers and the like. Historically, this part of the State Health Plan has run a big deficit, with the state largely subsidizing coverage for those school employees, Cook said.

Some school systems have said they want to see what other health coverage is available, Community Health attorney Alison Earles told the agency’s board. She added that some state authorities also “want to shop around.’’

Separately, Community Health recently sent out a “statement of qualifications’’ for potential vendors to consider as the state gears up to bid out the contract for covering the more than 650,000 people in the State Health Benefit Plan.

Currently, UnitedHealthcare and Cigna hold the contract, with United covering more than 90 percent of members. The bidding is certain to arouse intense interest from health insurers.

Recently, Community Health said Georgia teachers, other school personnel, state employees and retirees in the State Health Benefit Plan (SHBP) will face an average hike in their health insurance premiums of 9.5 percent in January, and some will get an increase of up to 30 percent.

The state employee health plan is in much better shape financially than at this time last year.

The SHBP finished fiscal 2012 with a relatively slight $16 million surplus, and there are no reserve funds available. Ideally, the reserve for the plan should be $346 million, officials have said.

But SHBP faces an $89 million shortfall this fiscal year and $418 million in 2014. The total deficits, including medical claims for services already incurred, are $288 million and $617 million, respectively.

Tim Callahan, a spokesman for the Professional Association of Georgia Educators, told GHN recently that the insurance cost increases are just a continuation of what’s been going on in the past several years. Meanwhile, educators haven’t had across-the-board raises in at least four years, he said.

Callahan, though, did not blame Community Health for the premium hikes. “They’re getting eaten alive by health care costs,” he said of the department.

The board of Community Health passed two resolutions Thursday establishing rules for how a school district or authority can back out of the plan.

State authorities have been allowed into the SHBP, but receive no state funding for that coverage to defray its costs.

Schools can jettison the coverage for their non-certificate personnel, but they are required to cover their employees who have certificates, including teachers, counselors and principals.

But some school districts are balking, Walter Jones of Morris News Service recently reported. “This is the first topic that has come up that I have actually seen school systems band together, and they’re standing up and saying no,” said Alice Marchman, finance director with the Burke County school system.

What prompted the quest for a new insurance provider is a decision by the state that’s boosting the employer’s share of monthly premiums by $150 this year and by the same amount in each of the next two years, Jones reported. If a school district or authority opts out of SHBP, their current retirees would stay in the plan. Newly hired workers, though, would not have that coverage.

Organizations that drop SHBP would save the state money on its long-term liability for retiree benefits, Community Health said Thursday.

Trudie Nacin, head of the SHBP, told Georgia Health News that a request for vendor proposals or “approaches’’ will go out in a month or two for the new contract that will begin in January 2014. No plans have been finalized, but that request will likely spell out whether the state wants one insurer or multiple plans to handle the SHBP business, Nacin said.

In order to win the contract, insurers would have to cover the entire state, she said. So regional health plans that want in would probably have to partner with other companies, she said.

“We are trying to lower the cost of the State Health Benefit Plan,’’ Nacin said. “We want better pricing, and competition is important for pricing.’’