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Idaho Transportation
Department

Public Affairs Office
P.O. Box 7129
Boise, ID 83707
208.334.8005
Fax: 208.334.8563
Email


Surplus will enable state to cover costs
of increased health insurance

Despite constantly rising costs of health insurance and increasing use of medical care, state employees will not pay more for insurance premiums in the coming fiscal year.

For the third consecutive year, increases in health insurance will be assumed by the state, announced Rick Thompson, administrator of Insurance and Internal Support for the Idaho Department of Administration. Thompson and Cynthia Ness, manager of the employee benefit program, provided details of the state’s health insurance program Thursday in two sessions at ITD Headquarters.

A series of meetings began Monday in Boise and will be continue in most of Idaho’s major cities through May 11.

Thompson said Blue Cross of Idaho – the state’s insurance provider – projects nearly $168 million in medical claims during the coming fiscal year but only $151.7 million in revenue from state and employee contributions.

The $16.2 million difference will be covered by a surplus in the state account. That’s the good news, Thompson said. But there may be a cloud on the horizon. The gap between claims and revenue is expected to reach $34.2 million by FY09, which likely would require higher premiums for state employees and adjustments to co-pay and deductibles.

Although health insurance premiums will not increase in FY08, employees will notice some important changes, Thompson explained.

  • The state will introduce an approved drug list (formulary prescription drugs)
  • Generic drugs will carry a $10 co-payment
  • Employees will pay 25 percent co-insurance up to a maximum of $50 for each drug identified as formulary
  • Employees will pay 50 percent of the cost of non-formulary drugs, up to a maximum of $100 per prescription
  • Generic “statins” (cholesterol-lowering medication) will require no co-payment
  • All prescriptions are subject to one co-payment/co-insurance for each 30-day supply; obtaining a 90-day supply of a prescription will require three co-payments
  • Preauthorization will be required for high-cost imaging services, such as CT, MRI, PET and MRA
  • A $100 co-payment will be reinstituted for emergency room visits that do not result in hospital admittance (the state required a $75 co-payment for emergency room visit some time ago)
  • Debit cards will be available for employees who participate in the flexible account program
  • Supplemental life premiums will increase 4.8 percent
  • The maximum monthly benefit under long-term disability will increase to $3,750 and a voluntary supplemental long-term disability plan is being developed

The state’s provider of long-term care insurance, Aetna Insurance Co., announced its intent late last year to discontinue participation, but through negotiations with the Division of Insurance, agreed to a three-year transition period. Idaho will re-bid the contract, implemented in 2006, for FY09.

Open enrollment for employees who want to change their medical options, add dependents to dental or vision coverage, or enroll/re-enroll in the flexible spending account is scheduled for May 14-30.

Thompson said state employees should receive a newsletter outlining the FY08 insurance program at their home address early next month. A copy of his PowerPoint presentation is available as a pdf (portable document format) download on the state employee portal: http://employee.idaho.gov/ Look for presentation slides under “Schedule of Statewide Meetings for Active Employees Group Health Insurance and Open Enrollment.”

Quick facts:

  • State agencies paid $126.6 million for employee health insurance in Fiscal Year 2006.
  • Active employees contributed $10.3 million, retirees paid $14 million and COBRA participants (former employees who pay their full premiums), added $1.5 million.
  • The total paid to the Department of Administration in FY06 was $152.5 million, of which $131.4 million went to pay medical claims, $1.2 million went to vision claims,
  • That left $6.4 million as a surplus that will be used to offset higher insurance premiums for FY08 and prevent increases from being passed on to employees.

Published 5-4-07