GIC makes sweeping plan design changes, raises rates

The state’s financially troubled Group Insurance Commission, which provides health insurance to state employees as well as approximately 60 municipalities, regional school districts and other entities, has adopted a sweeping combination of plan design changes and rate increases in order to close a large projected budget shortfall for fiscal 2016.
 
The GIC is also awaiting a $190 million supplemental budget appropriation to close its substantial fiscal 2015 budget deficit.
 
The GIC is anticipating rate increases to be in the 5 to 10 percent range, depending on which plan a member is enrolled in.
 
Plan design changes adopted by the GIC in February include co-payment increases for prescription drugs, specialists, inpatient hospital stays and outpatient surgery. Non-Medicare plan deductibles will increase from $250 for an individual and $750 for a family to $300 for an individual and $900 for a family.
 
The Harvard Independence plan and Tufts Navigator plan, the two most-subscribed GIC plans by municipal enrollees, will convert from Preferred Provider Organizations (PPOs) to Point-of-Service Plans (POSs). POSs maintain tighter control over the use of in-network doctors, which allows insurers to negotiate better contracts with providers and lower premium costs for employers and employees.
 
State employees hired before July 2003 pay 20 percent of their health insurance premiums, and those hired after July 2003 pay 25 percent. A provision in the governor’s fiscal 2016 state budget bill would have all state employees contribute 25 percent.
 
Municipal contribution rates vary, but the statewide average is roughly 75 percent paid by the city or town and 25 percent by the employee.
 
The GIC changes have implications for non-GIC communities, since the 2011 municipal health insurance reform act allows municipalities to benchmark their copayments and deductibles to the most-subscribed GIC plan (currently Tufts Navigator).
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