We now know the government of Guam will have to pay more for health insurance. What we don’t know is how much more.
The issue of covering GovGuam’s employees, retirees and their dependents came to light as the Legislature discussed the fiscal 2020 budget.
It was suggested the Judiciary give $1 million of its budget to the education department – to which the courts said “No,” because, under the recently concluded negotiations with Calvo's SelectCare, their health insurance alone is set to cost $500,000 more in the upcoming budget year than in the last.
The Judiciary only has 400 employees, so the full cost of this year’s GovGuam health insurance is still unknown. GovGuam’s health insurance program covers as many as 11,000 GovGuam members and their dependents. The cost of the new contract hasn’t been finalized because the selection process for the health insurer is in dispute.
We do know from the previous reporting in The Guam Daily Post that in past years, the annual cost has hovered around $90 million.
Law armed private hospital with strong negotiating tool
This year, there’s been a major change in the requirement for companies interested in bidding for GovGuam’s health insurance. The Legislature passed legislation that Gov. Lou Leon Guerrero signed into law a few months ago requiring that GovGuam’s health insurer must include health care at a private hospital on Guam. Everybody knows Guam Regional Medical City is the only private hospital in town, so this health insurance requirement – set in law – arms GRMC with a powerful negotiating tool. It can set payment rates that health insurers can’t refuse if they want the GovGuam contract.
Of the three health insurers, SelectCare has been the one that took on this additional requirement. Moylan’s NetCare bowed out of the GovGuam market, citing a prohibitive cost as a factor. And TakeCare is challenging Public Law 35-02 in the Superior Court and U.S. District Court of Guam.
We suggest GovGuam hold on to the current health insurance contract and continue with the current provider and rates, renewable on a month-by-month basis – until the courts decide on this issue.
The cost of GovGuam health insurance affects taxpayers in general, as well as other government services that would be deprived of funding because of the higher health insurance cost.
Private hospital wins; taxpayers and GovGuam workers shell out
GovGuam’s health insurance tab is a burden carried by all taxpayers. Ironically, many private-sector workers don’t even have health insurance through their workplaces, or can’t afford to pay health insurance on their own.
The Guam Federation of Teachers union had warned, when the idea of requiring private hospital coverage was still being discussed in the Legislature, that doing so would be costly also to GovGuam employees and retirees, because they would have to pay a higher share of their health insurance premium.
TakeCare also warned the requirement would increase the overall cost of GovGuam health insurance by $20 million a year – something GovGuam has tried to dispute.
Without knowing the full cost of what was then a proposed law, senators voted to pass the private hospital bill.
And the legislation became law quickly.
While financially strapped GRMC will get a financial boost from the legislation, it is now becoming apparent the financial losers will end up being the taxpayers and even GovGuam members.