Health insurers will have their eyes peeled on a major contract that’s heading to a bidding process in June. The Oregon Educators Benefit Board, which represents slightly more than 148,000 school district employees, retirees and dependents, will be on the look-out for insurers that can offer the coordinated care model, not to be confused with the 16 Medicaid-run coordinated care organizations now serving close to 1 million members. However, CCOs that hold an insurance license can participate. According to the tentative schedule, bid proposals are due August 5, and OEBB anticipates selecting the successful bidders on October 13, with the new contracts beginning October 1, 2016.
The stakes are high. In Gov. Kitzhaber’s proposed budget, now waiting for approval by the Ways and Means Committee, $1.6 billion has been set aside for OEBB over the next two fiscal years in Governor Kitzhaber's proposed budget for insurance premiums and other non-operational expenditures, and $12.25 million for OEBB’s operations, according to Denise Hall, deputy administrator.
The latest financials show that from October 2013-September 2014, OEBB paid out $672,713,639 for medical/dental and vision benefits; $13,791,537 for life, disability and AD&D; $696,795 for long-term care and $518,958 for employee assistance programs.
Currently Kaiser and Moda Health hold the cards for OEBB, and offer 11 different design options that have varied copayment levels and deductibles. Those contracts expire on September 30, 2016. At last count, Moda had the bulk of OEBB members – 104,695, compared to Kaiser, which insured 24,700.
Together their total enrollment is about 19,000 shy of all OEBB members because some people have only chosen a dental plan or vision coverage rather than a medical plan.
The complexity of handling 11 different health options has been daunting for OEBB, which, initially, didn’t have much say in the matter. When OEBB was created in 2007, legislators wanted to assure school districts there would be minimal disruption and they could keep their same choices, which, at that time, amounted to 98 different health plan designs.
“I’ve heard from district representatives and members now that there are still too many plan options, with more choices than people know what to do with,” said Hall.
Ultimately the decision about the number of health insurers and design options rests with OEBB’s board, which has just begun weighing into the process, and expects to begin discussing those details at its April 7 meeting. On April 28, board members anticipate setting the rates for the existing insurers, Moda and Kaiser, for the 2015 plan year.
But, everyone will be on equal footing for the next RFP, Hall promised, and no favoritism will be shown. Both statewide and regional insurers will be eligible.
Whoever decides to submit a bid proposal must offer an integrated model of care, and demonstrate best practices, offer clinical guidelines, abide by the recommendations of the Health Evidence Review Commission, focus on outcomes and adhere to the Triple Aim – lower cost, improve the patient experience and the health of the population.
Right now there are also 900 different employee groups in OEBB –which are part of an estimated 500-600 collective bargaining units -- some of whom are represented by the Oregon Education Association and OSEA, a labor union which represents 20,000 education employees. Also, OEBB represents 247 employers, including school districts, educational service districts and community colleges.
Besides medical plans, OEBB also offers dental, vision and long-term care coverage, however those benefits will not be part of the RFP process, because of affordability, Hall said. Under the Affordable Care Act, an excise tax that starts in January 2018 will slap a heavy penalty on health insurers whose medical premiums exceed the established threshold of $10,200 per year for employee-only coverage and $27,500 for family coverage. “That’s why it’s not a good financial decision to combine these plans,” Hall admitted.
In the 2015 plan year, which starts October 1, OEBB needs to keep its inflation rate at 4.4 percent, while the following year, it’s limited to a 3.4 percent increase for the new coordinated care model plans.
It’s important that OEBB meet those cost restraints by not increasing the copayment levels and deductible for employees, urged Felisa Hagins, political director of SEIU 49, when Hall presented her preliminary report at this week’s Health Policy Board meeting.
That won’t happen, Hall said, because the OEBB board is committed to keeping costs under control and doesn’t intend to over burden its members.
Nine school districts remain outside OEBB, and prefer to negotiate their own health insurance contracts. They include Beaverton, Medford, Ashland, West Linn and Wilsonville and together represent 18,000 employees. Up until the 2013 legislature, those districts had to meet a comparability assessment, showing their insurance costs did not exceed those of OEBB.
The Public Employees Benefit Board, which insures 130,000 state employees and their dependents, began its coordinated care model this January and chose the following plans: AllCare and Trillium – both of which limit benefits to Medicaid and Medicare recipients; Kaiser, Moda and Providence. Balance by Trillium.
TO LEARN MORE
To keep up to date on OEBB’s bid proposal, click here. http://www.oregon.gov/OHA/OEBB/pages/index.aspx
Diane can be reached at [email protected]
