By Dave Ranney
KHI News Service
Gov. Kathleen Sebelius unveils the new health insurance benefit packages for state employees during a Monday meeting with reporters. The plans include slightly lower premiums and incentives designed to promote healthy lifestyles. State employees have until Oct. 31 to choose their plans. (Dave Ranney/KHI)
TOPEKA, Oct. 1
Confident that wellness and prevention programs have helped control the state”s costs for employee health care, officials Monday announced plans to cut premiums for state employees with family coverage and lay a
cornerstone for broader health reforms that could affect all Kansans.
“Kansas is taking a major step forward in providing benefits to employees that really lead the way toward health reform,” Kansas Health Policy Authority Deputy Director Andy Allison said at a Statehouse press conference.
Allison shared the podium with Gov. Kathleen Sebelius, who said savings already generated by wellness and prevention programs would be used to lower premiums and enhance benefits.
“During the past three years, we”ve seen a decline in the overall health care costs for state employees, which is quite different than what you”re seeing in the general marketplace,” Sebelius said.
The governor attributed the decline to state employees “taking advantage of some of the opportunities to get a handle on their own health and making some positive choices” through state-sponsored wellness programs.
According to budget documents, the state”s cost for its employee health benefit plan last year was about $221 million; administrative costs and employee contributions pushed the sum to $371.5 million.
Health policy authority data shows that one-third of the 88,000 people
adults and children
now covered by state employee health insurance are overweight or obese. Nearly one in four smokes. The new plans include elements meant to decrease those numbers.
Seven options
Click here for larger graphic (Cathy McNorton/KHI)
Beginning today through Oct. 31, state employees have seven health-insurance options to choose from. All of them put greater emphasis on prevention and encouraging healthier lifestyles. The new plan choices become effective Jan. 1.
Currently state employee benefit plans are administered by Blue Cross Blue Shield of Kansas, Preferred Health Systems, or Coventry Health Care of Kansas.
Each of those companies will continue as administrators with each offering two state-defined benefit packages that cover the same things but at different costs and with different provider networks.
The packages
called Plan A and Plan B
do not charge workers for routine checkups, colonoscopies, bone density screenings, immunizations, annual mammograms or prostate exams if done through the approved provider network.
The plans also will include incentives aimed at helping workers stop smoking or other tobacco use and reduce co-pays for diabetic and asthma medications. They also will pay for the first three visits for outpatient mental health care or drug and alcohol counseling.
Plan A”s
co-insurance maximums are lower than those in Plan B. But premiums costs vary, depending on the plan, insurer and the employee”s income level. The health policy authority
Web site
has information to help workers sort through the new options.
But in general, those workers with family coverage should expect to see reduced costs. The state”s contribution for a family policy will now be 55 percent instead of 45 percent. For single-employee plans, the state contribution will remain 95 percent.
The seventh option available for state employees will be a Coventry-administered qualified high-deductible health plan that will promote the use of health savings accounts.
A move to self-insure
A portion of the plan enhancements
how much is unclear
will be underwritten by savings tied to the Kansas State Health Care Commission”s decision to self-insure.
The state already self-insures about 80 percent of the state-employee pool. After Jan. 1, the state will assume the risk for the entire pool but continue using Blue Cross, Coventry and Preferred to administer the plans.
States and other large employers can save money by self-insuring.
“What it boils down to is insurers have to do things
like maintain reserve funds and infrastructural things like new buildings and systems upgrades
that are built into the premiums,” said Graham Bailey, vice president of corporate communications and public relations at Blue Cross Blue Shield of Kansas. “When companies (or governments) self-insure, they don”t have to have to do those things, so their premiums
their costs
aren”t as great and the potential is there to save money. But they”re taking on risk that used to be the insurers.”
Dr. Doren Fredrickson, a preventive medicine professor at the University of Kansas School of Medicine-Wichita, welcomed news of the initiatives but warned that costs may outweigh savings in the early going.
“These kinds of things take some immediate cash up front,” Fredrickson said. “The savings tend to be farther down the road.”
But the new arrangement, he said, will give the state “immediate access” to billing data it needs to both structure and monitor its programs.
“If they have the infrastructure to evaluate that data and if their approach is one that”s community oriented, patient centered and physician- and hospital-friendly, they will be successful,” Fredrickson predicted. “People will be healthier and receive better health care.”
-Dave Ranney is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at
dranney@khi.org
or at 785-233-5443, ext. 128.