CapitolBeatOK Staff Report

Published: 17-Mar-2010

Two bills intended to streamline state employee health insurance benefits, improve choice and lower costs passed the House last week and are now moving through the Senate legislative process. One of the measures has attracted critical notice from an Oklahoma City lawmaker.

The two proposals are based on recommendations made in a report by Milliman Inc. to the Oklahoma State Employee Health Insurance Review Working Group, which met during the interim last year.

That report was requested to examine the functions of the Employees Benefit Council (EBC) and the Oklahoma State Education and Employees Group Insurance Board (OSEEGIB) and to determine if a duplication of efforts existed between the two agencies.

“We want to offer state employees a variety of health insurance options at reasonable costs,” said Republican House Speaker Chris Benge. In his comments, sent to CapitolBeatOK, Speaker Benge reflected, “This legislation is still a work in progress as we seek to lower costs to the state while maintaining, or possibly even improving, health care services to our state employees.”

The study examined current practices and made recommendations for the most cost-efficient and cost-effective way to leverage state dollars to ensure the highest level of health care for state and education employees at a competitive price. The report concluded:

•         The functions of OSEEGIB and EBC should be integrated to form a new organization focused not only on the payment of health and other insurance claims but also on the wellness of the covered individuals

•          With the merged agencies, one oversight board should be created that would include members from backgrounds including medical and employee benefits, as well as those from legal and fiscal backgrounds

•          Include a stronger wellness component, not only within Health Choice consumers, but those with HMO plans as well

•          The state employee benefit allowance is artificially inflated because the more expensive HMO plans — which few state employees utilize — drive up the benefit allowance as a result of the averaging of all offered plans to calculate the benefit amount

•          More choice is needed in rural areas of the state.

“There are duplicative efforts that could be streamlined for improved efficiency,” said state Rep. Lewis Moore of Arcadia, a Republican and co-chairman of the working group. “Premium costs have risen exponentially. This legislation will work to bring down costs for the state and state employees alike.”

“We hope to integrate many of the Milliman recommendations into this legislation, which will allow us to address rate increases while creating a more open and accountable system,” said Rep. Jason Murphey of Guthrie, a Republican and chairman of the House Government Modernization Committee. He was also a member of the working group. Murphey, whose committee processed the legislation, said, “It is important we not rush this effort, but instead work to get it right.”

The full report is available within the “Information” tab under “House Publications” on the House web site.

House Bill 2324, by Murphey, passed the House 62-13, with 26 members absent. Gary Stanislawski of Tulsa is Senate sponsor of the measure. A  companion measure, Moore’s House Bill 2888, passed 70-9.

In a statement sent to CapitolBeatOK, Anastasia Pittman, representing east Oklahoma City at the Capitol, challenged H.B. 2324, contending taxpayers and state government employees both would be losers under the bill’s provisions. She spoke against the measure in last week’s debate, and reiterated her key points in a statement on Monday (March 15), as H.B. 2324 went through first reading in the upper chamber.  

Pittman, a Democrat, said, “The author of this bill claims that it will result in savings of 20 percent annually, but the only solid numbers we have on fiscal impact show an initial expense of $3.2 million and annual expenses of between $1.7 and $2.5 million.”

Pittman continued, “This bill would require substantial duplication of services between OSEEGIB and EBC, services which EBC is not presently equipped to provide. The only way to implement it will be to hire many new employees at EBC. This duplication would by necessity continue in perpetuity because of the databases that have to be maintained in support of the policyholders, which makes it difficult to understand how this could ever result in any savings.”

Pittman asserted, “Additionally, the state paid $50,000 for a study on this matter for our interim task force, and other than eliminating the practice of contracting with multiple HMOs, the contents of this bill not only do not reflect the recommendations of either the study or the task force, they are actually in conflict with some of those recommendations.”

In her conclusion, Rep. Pittman said, “Rather than saving money for our state, I believe this proposal will result in higher costs to taxpayers and the possibility of lower quality of service for state and education employees. It is unfortunate that the bill passed in the House, but I still have hope it will come under more careful scrutiny and meet its end in the State Senate.”