St. Thomas – The Committee on Finance chaired by Sen. Kurt Vialet, met with officials from Health Insurance Industry at the Capitol Building on Wednesday, to receive testimony on the recent rate changes to the Government of the U.S. Virgin Islands Health Insurance Coverage under Cigna.
“The process of negotiations for health insurance policy was placed on hold because of Hurricane Irma and Maria that hit the Territory. The Governor’s recommendation was to increase the government/employee contributions from 65%/35% to 60%/40% for active government employees and retirees and 50%/50% for retirees under 65 years old. As a result of the hurricanes and a rollover budget the cost share has remained the same,” said Sen. Vialet.
“Can you expound on the impact of 60%/40% vs 65%/35% of government and employee contributions?” inquired Sen. Marvin Blyden. Kurt Gehring, Chief Executive Officer for Gehring Group, stated that the 60%/40% increases the premium to $165 million. There is a 2% risk charge due to the possibility of healthy family members terminating their coverage while sick family members remain on the plan. By maintaining the 65%/35%, it is advantageous to accept the renewal with no changes to the existing health care cost share.
The 60%/40% also increases the employee’s share of the premium to $11.6 million; while the existing insurance plan increases it by $2.4 million added Beverly Joseph, Chairperson of the Government Employees Service Commission Health Insurance Board.
Sen. Brian Smith stated that increasing premiums could adversely affect government employees. “The 60%/40% plan places a financial burden on government employees. The salaries of the employees do not increase as fast as the insurance premiums.”
The original renewal request was for a 15.8% increase. However, after several negotiations with the Government of the Virgin Islands, it was agreed for 5% for the Medical Plan and 3.9% for the Dental Plan. The 5% was contingent upon the contribution split remaining at 65%/35%; according to Dorothyann Callahan, Sr. Client Manager for Cigna.
“Every year we aim to reduce the cost of health insurance. However, it often remains the same. Can you quantify the 5%?” asked Sen. Positive Nelson. In response, Scott Evelyn, Market President for Cigna South Florida/Caribbean said, “The 5% or $6 million was a projection based on a formula to negotiate the reduction of health insurance rates.”
Sen. Jean Forde asked, “What drives the cost of insurance?” Joseph said, “Insurance rates increases based upon the number of claims filed by employees. The highest claims in the Territory are for high blood pressure, diabetes, cancer, muscular-skeletal and cancer.”
Ultimately, lawmakers are awaiting the health insurance package to be sent down from Governor Kenneth Mapp. Therefore, members of the Senate will ratify the package at a later date.
Committee members present are Kurt Vialet, Dwayne DeGraff, Tregenza Roach, Novelle Francis, Neville James, Brian Smith, Marvin Blyden. Non-committee senators are present Janette Millin Young, Positive Nelson and Jean Forde.