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Health
Insurance Premiums Expected to Rise in FY01: GIC Signs New Drug
Benefits Manager
Even a more economical deal to manage pharmacy benefits will not stave off higher health insurance premiums for 140,000 state employees and their families in the coming year, a Group Insurance Commission official said last week. Dolores Mitchell, executive director of GIC, told The Boston Globe that health insurance costs are likely to rise an average of 10 percent for Fiscal Year 2001, which begins July 1. The news of higher costs came as Mitchell announced a deal with Express Scripts to manage pharmacy benefits for state workers enrolled in the GIC's indemnity and PPO plans. Health maintenance organizations (HMOs) manage their own drug benefits. While the switch from Merck-Medco Managed Care is expected to save the state about $4.4 million in drug costs, Mitchell said the price tag for providing medicine to state employees will still rise beyond the current level of $90 million. According to the January issue of "For Your Benefit," the GIC's newsletter, the commission's pharmacy costs for the indemnity and PPO plans have risen about 21 percent annually for the past three years. During FY99, the state paid $660 per GIC member, compared to $365 per member in FY96. As pharmaceutical companies continue to charge more for new medications, the costs are expected to be passed along to employees through health insurance premiums. According to the Globe, monthly premiums for HMO members are expected to increase by more than 10 percent, while the rates for indemnity and PPO plans will increase less than 10 percent. Current employee premiums for health insurance in Western Massachusetts range from $27.75 for individual coverage to $160.05 for a family in the GIC Indemnity Plan with Catastrophic Illness Coverage. Mitchell told the paper that all state employees will have access to the same drugs, but as of July 1 they will pay higher co-payments for brand-name medicines. Under a plan adopted by the commission in December, the indemnity and PPO pharmacy programs will move to a three-tier, co-payment system for generic, brand-name drugs. GIC also plans to add a discount for over-the-counter drugs purchased through its mail order pharmacy program. |
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