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updated: 5/28/2014 11:24 AM

Wisconsin again considers self-insuring workers

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Associated Press

MADISON, Wis. -- Wisconsin is accepting bids in a renewed effort to self-insure more than 200,000 state employees who receive health insurance through the Department of Employee Trust Funds, a move Gov. Scott Walker first proposed last fall but that was tabled.

By self-insuring state employees the state would pay benefits directly and assume risk for losses. It would be a switch from the HMO plan that's been used in Wisconsin since 1984. Under that plan, the state buys insurance from 18 companies from which employees and their family members choose.

The Wisconsin State Journal reported Wednesday that ETF issued a request for proposals on Friday and could issue a two-year contract in September. The idea, considered last fall, was put on hold after the Wisconsin State Employees Union and Wisconsin Association of Health Plans voiced opposition.

Self-insuring could give state officials more control over worker benefits, and the Wisconsin Association of Health Plans said it would eliminate 15 percent of the state's fully insured insurance market and increase the state's health costs by $200 million.

The consulting firm Deloitte determined that self-insuring employees could save the state as much as $20 million but could also cost it more than $100 million.

ETF now wants to evaluate 10 aspects of the nearly $1.5 billion state worker benefits program, including pharmacy, wellness, mental health, disease management, the use of consumer-driven plans, efforts to steer patients to certain providers and switching to self-insurance.

The previous Deloitte reports looked specifically at self-insurance.

"The goal here is much broader, to take an overall look at the structure of our plan and make recommendations on the plan design," said Lisa Ellinger, insurance administrator for ETF.

At least 20 states self-insure all state employees and 26 self-insure some workers, according to the National Conference of State Legislatures. Wisconsin self-insures less than 5 percent of workers in a plan run by WPS Health Insurance.

About 247,000 people -- state and local employees, retirees and family members -- are insured through ETF.

The Walker administration has been looking at initially self-insuring all 207,000 state employees, retirees and their families, Ellinger said. It's not clear what would happen with the 40,000 workers and families in the local government insurance program.

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