New insurance contracts said to save Vt. $10 millionBy PETER HIRSCHFELD
Vermont Press Bureau | August 22,2013MONTPELIER — Gov. Peter Shumlin is hailing three new insurance contracts that he says will save the state an estimated $10 million in employee health care costs in 2014.
A competitive bidding process to administer the state’s self-insured medical plans saw Vermont end its long-running relationship with Cigna in favor of an offer submitted by Blue Cross and Blue Shield of Vermont.
Commissioner of Human Resources Kate Duffy said Thursday that the Blue Cross bid contained more favorable provider rates than the ones negotiated on the state’s behalf by Cigna. Duffy said the state paid out $119 million in medical claims last year; under rates negotiated by Blue Cross, she said, those costs would have been $5 million less.
“The way to save on costs on a plan like this is primarily on discounts you can get from providers that are negotiated by these (insurance) companies,” Duffy said.
The state also put out to bid contracts to administer its prescription and dental plans. And while Vermont has selected the same carriers it’s used in the past — Express Scripts and Delta Dental, respectively — Duffy says the companies will deliver increased savings.
Lower pharmaceutical costs negotiated by Express Scripts, according to Duffy, will save the state a projected $5 million in 2014.
The state of Vermont is self-insured, paying out of pocket to settle the medical claims amassed by the 23,000 current and retired state employees as well as family members covered by the plan. But the state contracts with private carriers to administer the plan, and negotiate rates with providers, a task Duffy said the state is ill-suited to handle itself.
“We don’t have the capacity to do that, and I don’t think we have expertise or the technology that the companies who were bidding on this have,” Duffy said.
Duffy said the savings do not in any way derive from changes to the employee benefit plan, the terms of which are negotiated between the administration and state workers union during contract talks. But under the Blue Cross bid employees will also gain access to the insurance carrier’s wellness program.
“I am confident Blue Cross’ new Accountable Blue program will help us save costs and, more importantly, improve the health of our state employees and their families,” Shumlin said in a statement.
Peter.firstname.lastname@example.orgMORE IN Vermont NewsBARRE — Republican Scott Milne promised to steer the state away from Gov. Full Story
- Most Popular
- Most Emailed
- TODAY'S WEATHER MINUTE: Rutland Herald content editor Rich Alcott shares local weather information and easily digestible news tidbits: Ever wonder why the otherwise straight-lined Appalachian chain's got a big crimp in it in Pennsylvania and and New York?
- TOMORROW'S HEADLINES TODAY: Scott Milne opens campaign for governor's office, crime statistics fall in city, new home for homeless prevention center, traffic cameras are not watching you, capital panel hears testimony about protecting children.
- TODAY'S WEATHER MINUTE: Rutland Herald content editor Rich Alcott shares local weather information and easily digestible news tidbits: America's feet getting bigger than ever, and Americans keep jamming their feet into small sized shoes. Wake up, America!
- RICHARD'S POOR ALMANACK: Vanessa Williams resigns from Miss America pageant after Bob Guccione publishes nude photos of her in Penthouse magazine and Hefner takes the high road; on this day in 1995, Alan Hale and Thomas Bopp discover a new comet.
- TOMORROW'S HEADLINES TODAY: Brandon voters decide fate of proposed budget, calls to police for service on complaints have fallen to new low, city woman who spray painted a response to vandals on her sidewalk is cited for mischief.
- TODAY'S WEATHER MINUTE: Rutland Herald content editor Rich Alcott shares local weather information and easily digestible news tidbits: When all the big mammals are rubbed out and a faint geologic memory, rats the size of human beings will stalk the Earth.