PEBB Prioritizes Potential Plan Cuts
But size of the board’s 2012 budget hole remains a mystery
March 16, 2011--The Public Employees’ Benefit Board, facing a gaping budget hole next year whose size is still unknown, has devised a draft priority list of potential cost-saving changes to health benefits for state workers.
Topping the list of 26 potential changes, which board members individually ranked in order of importance and collectively reviewed at their Tuesday meeting, was creating strategies to persuade workers to switch to one of PEBB’s less-expensive plan options, offered through Kaiser Permanente or Providence Choice.
Other top priorities included increasing the out-of-pocket maximum for employees from $1,000 to $1,500; making members who refuse to fill out a health risk assessment and participate in wellness programs pay more than those who do; and going from no deductible to mandating a $250 deductible for in-network treatment and $500 for out-of-network treatment.
“These are the things we would want to target first as those that would help us bend the cost curve,” said Rich Peppers, the board’s chair.
The board must approve any and all changes by April 19.
On March 1, the board approved benefit reductions to members as a means of closing this year’s $10 million budget gap. The board’s work on Tuesday addressed the projected shortfall for 2012.
Overall, board members did not favor requiring employees to contribute to their premiums. It ranked near the bottom of the priority list even though Governor John Kitzhaber has suggested it as part of union contract negotiations.
Board vice-chair Rocky King, the interim director of healthcare purchasing for the Oregon Health Authority, urged members representing unions to take another look at the issue.
Asking members to pay a part of their premiums, according to King, "spreads the cost to the largest group, rather than focusing on the 25 percent to 30 percent [of the insurance pool] who drive the costs."
Further complicating the board’s consideration of cost-saving measures is the fact that they’re still unsure of how large their 2012 deficit really is.
The PEBB operations subcommittee was scheduled to have figures for the board by Tuesday, but subcommittee member Paul McKenna, the research director for SEIU-Local 503, reported that PEBB staff is still crunching numbers. The board completed its priority survey based on an assumption that the board was facing a deficit of either $25 million or $50 million in 2012.
“The numbers I saw [at yesterday’s subcommittee meeting] were really concerning,” said Peter Callero, a sociology professor at Western Oregon University and a member of Local 2278, Western Oregon University Federation of Teachers.
Indeed, Callero and McKenna are anxious about the size of PEBB’s deficit. Staffers were considering budget deficits that could top $100 million. They’re supposed to have more concrete figures ready for the operations subcommittee by early next week.
“On a down trend, we’re going broke,” said board member Fariborz Pakseresht, who directs the Oregon Youth Authority.
TO LEARN MORE:
Public Employees’ Benefit Board website: http://www.oregon.gov/DAS/PEBB/index.shtml
Prior PEBB coverage in The Lund Report here.
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Well, I'm sure PEBB's members are happy that its committee saw fit to end the Regence contract and go to a vastly inferior Providence plan, with its carve out for mental health services that virtually guarantee lack of coordinated care and higher resulting out of pocket costs to members because of the change in provider networks, all in the name of saving money. Nice work, PEBB committee. Really, very nice work.
My wife and two children and I live in the state of Illinois. Our current health insurance plan is a Choice Plan that is provided by "Wise Medical Insurance" . The plan itself is a consumer driven health care plan.