Tuesday, October 21

Wellmark to Be Only State Insurance Provider

Iowa's Executive Council (which consists of the Governor, Auditor, Secretary of Agriculture, Secretary of State, and Treasurer) and voted 3-2 to give monolithic insurance-provider Wellmark a monopoly for state government employees.

According to the Chicago Tribune, "Under the plan, employees beginning Jan. 1 won't be able to choose plans offered by United HealthCare, and will have to select those offered by Wellmark.

Supporters say the change will save the state as much of $9.5 million in 2009 and possibly that much in 2010.

Opponents say thousands of workers will be left with fewer options. They also cast doubt on the savings projections, saying Wellmark could increase rates in the last year of the two-year agreement."

The story below from Iowa Politics.

Wellmark will be state government's only health insurance provider come Jan. 1, following a 3-2 decision today by the Iowa Executive Council to eliminate United Healthcare and make Iowa the eighth state in the nation to only offer one health insurance provider to its employees. It would cost $75,000 for the state to put the issue out to bid, and that is not expected to happen now until January 2010.

"If it's working for the state, why bid it?," asked Ed Holland of the Department of Administrative Services, who argued that the move to Wellmark would save families about $100 a month and the state up to $9.5 million next year. "They basically have 92 percent of our business right now. I don't think they're going to change tactics by getting another 2,500 contracts."

Gov. Chet Culver pushed for the change over the past few weeks and called for a vote on the issue three times today. "Any opportunity we have in government to find cost savings, I think we need to find it," he said. "I think this is an opportunity to save the taxpayers a significant amount of money."

All four members aside from Culver -- Republican Ag Secretary Bill Northey, Democratic Secretary of State Michael Mauro, Democratic state Treasurer Michael Fitzgerald and Republican state Auditor David Vaudt -- made statements today against the proposal. They said they were nervous, uncomfortable and concerned about the decision, and described the process as "seriously flawed." However, despite their concerns, Vaudt and Fitzgerald switched their votes from last week and reluctantly joined Culver today in voting for the plan.

Ranking State Rep. Carmine Boal -R, Ankeny said, "If the state can lock in four years of health insurance increases at the 1.9 percent proposed by Wellmark for 2009, that's a great deal for the taxpayers and state employees. But if that rate only applies to 2009 and we eliminate competition, where is the incentive for Wellmark to keep the cost to the taxpayer down?"

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