Almost Doubled in Five Years
SEPTEMBER 2016 VOICE: According to a recent analysis by the Group Insurance Commission (GIC), municipal enrollment in the state health insurance program has almost doubled from July 1, 2010 to July 1, 2015 (FY11 – FY15). During that five-year period, the number of municipal enrollees rose from 35,700 to 70.600 (98%).
Almost Doubled in Five Years
SEPTEMBER 2016 VOICE: According to a recent analysis by the Group Insurance Commission (GIC), municipal enrollment in the state health insurance program has almost doubled from July 1, 2010 to July 1, 2015 (FY11 – FY15). During that five-year period, the number of municipal enrollees rose from 35,700 to 70.600 (98%).
“What is particularly striking when one looks at the graph showing municipal enrollment (see graph, p. 18) is the sudden growth of enrollees in the GIC OME (Optional Medicare Extension) Plan,” comments Insurance Coordinator Cheryl Stillman. “From less than 8,000 in 2010 to almost 18,000 in 2015 is a significant jump.”
“This uptick may have been caused by a major change in the municipal health insurance law back in 2011,” according to Legislative Director Shawn Duhamel. “I’m referring to the ‘Medicare Mandate’ Law that required all local retirees, who are eligible for Medicare, to enroll in the federal health insurance program.
“This mandate applied to all Medicare-eligible retirees. So even if you were covered by a non-Medicare insurance plan when the mandate became law, you had to transfer over to Medicare.”
And when it comes to Medicare enrollment, a larger share of local enrollees were in the program than state enrollees – 42% versus 36%. This may be due to the fact that there is a higher proportion of municipal enrollees who are retired according to the GIC analysis.
Among its other findings, the GIC noted that in FY2015, as has been the case every year, the local average costs per enrollee were lower than the state average (see graph, p.18). State costs are more because, as the analysis shows, state enrollees tend to select insurance plans with the higher premiums and choose more family coverage than their local counterparts.
GIC officials also found that in FY15 both local and state costs were higher than the average full-cost premiums of the plans selected (see graph, p.18). Not surprising, a major reason for this is the significant increases in prescription drug costs that we’ve been experiencing since 2014.
While it’s true the costs exceed the premiums, the analysis found that the local enrollees are doing a better job of covering their costs. “This appears to run counter to the claim by some that GIC state enrollees are subsidizing the local enrollees in the program,” observes Duhamel.
“More importantly, members may be alarmed by the finding that costs were exceeding the premiums. But it’s important to remember this shortfall was due to a number of factors that converged back then in FY15, including greater than projected utilization by enrollees. Ed Note: The FY15 shortfall was addressed in a GIC supplemental appropriation.
“But, that same fiscal crisis did not reappear in FY16, which just ended on June 30. While the books have yet to be closed, it appears that the GIC will be ending the (fiscal) year without a deficit.”
Other Findings
Additionally, the GIC analysis found the following when it compared municipal and state enrollment in the program.
- Generally, a higher proportion of municipal enrollees were retired.
- Overall, state enrollees chose plans with higher premiums than did municipal enrollees.
- State enrollees had a slightly larger share of family contracts and smaller share of Medicare contracts.
- Across the non-Medicare plans and all Medicare plans, municipal enrollees were younger (about one year with non-Medicare and slightly over one month with Medicare)
Also, as the analysis reminds us, while costs exceeded premiums in FY15, it’s important to note that fully-insured plans, such as Fallon Direct and Select, Health New England and Neighborhood Health HMOs, (versus self-insured plans such as Unicare, Harvard Pilgrim and Tufts) break even, meaning the premium is paid to the health insurer who then assumes the risk of paying any costs exceeding the premium amount paid. Over 25% of municipal enrollees were in fully-insured plans while 17.5% of state enrollees were fully-insured.