The continuous debate regarding the government of Guam’s plan for a fully self-insured group health insurance has received heavy statements from the Office of the Governor, Guam senators and medical providers not just due to possible costs, but also due to the access of care.
Dr. Hoa Nguyen, co-founder of American Medical Center, stressed that the main liability of the proposal is the access to care for thousands of GovGuam employees, family members and retirees who might be displaced from their main medical provider.
“The government has possibly over five thousand people who currently use TakeCare as their insurance and use FHP as their primary care clinic. FHP does not have a contract with SelectCare, so where are those patients going to go?” questioned Nguyen. “If those people don’t have access to care, they’re going to end up in the emergency room and costs will skyrocket. Bigger clinics are drowning with patients already, and some small clinics are shutting their doors due to retiring doctors.”
Nguyen further noted the need for GovGuam to have a proper meeting with the Guam Medical Association, the Guam Medical Society and other medical providers on Guam.
“I’m surprised the government plans to adopt a health plan with open questions that no one knows the answers to,” said Nguyen. “The providers want to get involved and try to help the government make the best decision.”
Sen. Joanne Brown, vice-chair of the legislative committee on health, echoed Nguyen’s sentiment as she questioned the access to healthcare services after the plan’s implementation.
“The real issue is ultimately finding out what the plan will cost and what services will be provided,” stated Brown. “What impact will this have on the healthcare companies? More importantly, what will the impact be on the retirees and their beneficiaries?”
Sen. Frank Blas Jr., vice-chair of the legislative committee on human resources, further added that this plan should have already publicized rates for GovGuam employees, family members and retirees.
“When we’re this close to something that’s about to be rolled out, the people that are going to be affected by this would like to know what it’s going to cost them. Share it with the people,” said Blas.
According to a news release from the Office of the Governor of Guam, the self-insured GovGuam health insurance plan will result in lower premiums than it would if a contract was not self-insured.
The governor’s office noted that a third-party actuarial report provided by Milliman indicated that total insurance premiums were predicted to go up by 15 percent this year.
“By self-insuring the health insurance coverage, employee and retiree premiums for those who currently have SelectCare will actually go down, and premiums for those who currently have TakeCare will only increase by five to eight percent compared to 15 percent,” shared the governor’s office.
They noted that since GovGuam does not have to make a profit from the insurance, premiums paid by GovGuam employees and the government’s contribution towards those premiums will be set aside in an account to build up a reserve that can be used to further drive down premiums in subsequent years rather than belonging to private shareholders.
Dr. Thomas Shieh, owner of Dr. Shieh’s Clinic and Assocates, Inc., shared his thoughts on how the potential savings by self-insuring can still be a risk.
Shieh noted that despite the government trying to save employees seven percent of costs from insurance premiums, GovGuam already admitted they have no idea what the cost of healthcare claims will be for self-insurance.
“It’s not a better choice to self-insure, it’s a risk,” said Shieh. “I would think knowing a fixed cost would be the way to go. A 15 percent increase is not bad when compared to testimony from the Guam Memorial Hospital. The cost for healthcare has gone way over 15 percent in cost of supplies and labor to the point that GMH can’t even pay their vendors.”
The governor’s office then noted that GovGuam would be entering into a stop-loss insurance contract to cover catastrophic claims above a specified level
The news release further noted that claims by Sen. Blas. that dental and pharmaceutical claims were higher than the premiums GovGuam collected were unsubstantiated.
“If the claims cost more than the premiums, there is no way private companies would be able to afford to insure GovGuam without significant premium increases,” noted the governor’s office in the release. “No private carriers would ever bid competitively on GovGuam health insurance.”
According to Blas, his claims were based on an aging report provided to both him and GovGuam, which indicated that the “year to date” prescription drug claims for fiscal year 2022 to 2023 amassed over $27 million dollars while the premiums collected were just a little over $19.4 million dollars. This produced a claims ratio of 139.45 percent.
With the dental claims, the YTD for FY 22 to 23 indicated claims nearly $300,000 more than the premiums collected, which has so far led to a claims ratio of 106.94 percent.
The Office of the Governor further addressed Blas’ introduction of Bill 154-37, which would roll over the current GovGuam health insurance contract for another year.
“This bill would violate the Constitution and expose the government of Guam to lawsuits as it would impair the obligations of previously negotiated contracts. The current contract does allow for a 90-day extension, but anything beyond 90 days requires a renegotiation,” noted the governor’s office. “It does not allow for an extension of an entire year at the same rate, which means these private insurers cannot be forced to extend the same premiums for an entire year. In fact, as mentioned previously, private insurers were expected to raise premiums this year by about fifteen percent. The Government of Guam would not be able to force these private insurers to provide health insurance coverage at the same rate for another year.”
According to the Office of Tina Muña Barnes, the committee report regarding Blas’ bill with committee findings would be publicized by early next week at the latest.
The governor’s office further noted that Blas owns an insurance brokerage firm called Frank Blas & Associates, Inc.
“This alone should cause a question of motive, and it could also potentially require his recusal from this entire process,” noted the governor’s office in the news release.
Blas then clarified that he is not in the business of health insurance.
“It is undeniable that I own an insurance brokerage firm, but more importantly, I don’t sell nor do I market any health insurance,” clarified Blas. “It’s not my line of business. I do want to thank them for advertising my firm.”
Shieh further addressed the office of the governor’s criticism of Sen. Blas.
“The criticism of Sen. Blas regarding his family with insurance business was uncalled for because they did not bid nor did they have anything to do with benefiting,” added Shieh. “In fact, to me, we should appreciate Sen. Blas’s background for his expertise.”
