- Associated Press - Wednesday, March 25, 2015

MADISON, Wis. (AP) - It’s not feasible to move to a self-insurance model for Wisconsin state employees next year, but such a change could save the state up to $70 million a year, a consultant said in a report delivered Wednesday.

Gov. Scott Walker’s administration has been eyeing moving from a competitive HMO model to self-insurance for roughly 240,000 state workers and family members since 2013. Under a self-insurance model the state would pay benefits directly instead of buying insurance from 18 HMOs.

Last year, Walker shelved the idea and ordered the consultant’s report after the idea ran into opposition from the Wisconsin State Employees Union and Wisconsin Association of Health Plans.

Atlanta-based Segal Consulting submitted its preliminary findings Wednesday to the state Department of Employee Trust Fund’s Group Insurance Board, the Wisconsin State Journal reported (https://tiny.cc/8bh2vx ). Final recommendations will be presented to the board at its May meeting.

While it’s not feasible to make the switch next year, moving to a self-insurance model could save the state between $50 million and $70 million a year starting in 2017, the report said.

Phil Dougherty, senior executive officer of the Wisconsin Association of Health Plans that represents HMOs that provide state employee coverage, said the potential savings outlined in the report had not been thoroughly analyzed and disagreed that self-funding could be a viable option in 2017.

“We believe such a significant policy change would put the State of Wisconsin at great financial risk,” Dougherty said in a statement. “The current model gives employees a choice between multiple private health plans aligned with local providers, with no new risk to Wisconsin. Self-funding would eliminate that choice.”

The report recommends introducing deductibles for state workers, increasing out-of-pocket maximums, charging more for brand-name drugs and other changes that could save at least $42 million next year.

The consultant’s report found that Wisconsin state worker health benefits are richer than in neighboring states.

Walker’s budget calls for cutting $25 million over the next two years out of the $1.4 billion state worker health insurance program.


Information from: Wisconsin State Journal, https://www.madison.com/wsj

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