The two principal architects of the 2020 budget aren’t yet able to say the projected total cost to Guam taxpayers for the health insurance for government of Guam employees, retirees and their dependents in the upcoming fiscal year.
Neither the director of the Guam Legislature’s Office of Finance and Budget, Stephen Guerrero, nor Lester Carlson, the director of the executive branch’s Bureau of Budget and Management Resources, was able to provide a projected cost for health insurance coverage, even though next year’s budget is now Public Law 35-36.
The budget law doesn’t include a total projected cost for GovGuam health insurance.
Both Carlson and Guerrero explained that the final contract details are still being hammered out with Aetna International, the company that has tentatively been awarded the major contract.
GovGuam is proceeding with final contract negotiations with Aetna despite lawsuits filed by TakeCare Insurance over the procurement process and the company’s request for a temporary restraining order to block the final contract award.
Carlson did say that the total projected cost in fiscal 2019, which ends this month, for health insurance coverage for GovGuam line agencies and departments as well as all its autonomous agencies is roughly $97 million, but that is not the cost to Guam taxpayers.
He said the $97 million figure represents the “cumulative amount” of the government’s premium costs and the premiums paid by GovGuam employees to the two current health insurance providers, TakeCare Insurance and Calvo’s SelectCare.
Subtract the premiums paid by GovGuam employees and the health care premiums paid by the autonomous agencies who cover their own health care costs and you’re left with what is paid out of the General Fund for health insurance coverage.
It’s that amount that hasn’t been finalized.
According to a June 2018 audit issued by the Office of Public Accountability, the taxpayer-funded amount for GovGuam health insurance was $76.3 million in fiscal 2017.
For the past two years, as a result of protests filed by TakeCare over the procurement process, the contract cost for GovGuam health insurance has rolled over, with some premium increases in the 2018 and 2019 spending years.
However, neither Carlson nor Guerrero could say what the total cost to GovGuam has been in either of the past two fiscal years. Both referred The Guam Daily Post to the director of the Department of Administration, Edward Birn.
On the advice of legal counsel, Birn said he could not provide any information about the projected cost of the Aetna health insurance contract “because there are financial parts of the contract that have not been resolved.”
Last week the governor called Aetna’s bid “the most economical and beneficial health care insurance proposal plan.” However, it’s not clear how that conclusion was reached, since the final terms of the contract have not yet been decided.
The final contract has to be hammered out before the end of this week because open enrollment begins on Monday, Sept. 23. That is when the rate sheet, based on the final contract, must be provided to GovGuam employees so they can select their coverage plan.
An insurance insider with knowledge of previous contract negotiations told the Post that the projected 2020 health insurance costs for GovGuam are estimated to be between $75 and $78 million; however, that is expected to increase substantially before fiscal 2020 ends.
The Judiciary of Guam, which negotiates its own health insurance contract, recently said the health insurance costs for its 417 full-time employees jumped by $500,000 for fiscal 2020. The Judiciary’s health insurance contract award went to Calvo’s SelectCare. It was “more expensive than anticipated,” said Shawn Gumataotao, director of policy planning for the Judiciary.