Campus News - December 10, 2001
Rising cost of healthcare means changes for insurance
By Susan A. Carkeek Associate Vice President/ Director Human Resources
The Universitys employee health insurance contracts will expire at the
end of this fiscal year, and we are preparing to negotiate new contracts for
2002-2003. To gather input from campus, the Human Resources Benefits Office
has surveyed staff and faculty for their perceptions of our current plans and
what they would like included in the new contracts. We appreciate the participation
of all of you who responded. The most significant results of the survey indicated
that you want choice and that you do not want increased payments. Those responses
point us to find a way to continue to offer variety at reasonable rates.
With the rising cost of health care and UNMs high utilization rates,
this is no easy task. If we continue with the same four vendors we now useLovelace,
Presbyterian, Cimarron and Cigna we expect significant rate increases.
This is due in part because UNM employees can choose among the four carriers;
no one carrier has a large number of employees. Also, the variety of plans makes
plan administration complex and drives up costs.
We are now developing a request for proposals to allow insurance carriers to
bid on employee health plans. A decision will be made in March. Open enrollment
will be in April, and the new contracts will begin July 1, 2002.
We are asking vendors to provide bids for three possible alternatives: 1) Status
Quo four carriers, three of which offer HMO plans and one PPO plan; 2)
Dual Option Only; and 3) Dual Option plus HMO.
For the Status Quo, little would change except costs, with increases projected
to be double digit.
Under the second alternative, a Dual Option Only plan, we would offer one insurance
plan for all employees. However, that one plan would combine an HMO model with
a new out of network benefit for everyone. In the HMO portion, you
would have a primary care physician who coordinates referrals, and fees are
co-pays. In the out-of-network portion, you could select any provider without
a referral; fees for this portion are subject to a deductible, and a percentage
of the cost is reimbursed. You could choose the HMO or out-of-network provider
at the point you obtain services. Although this option would probably be more
expensive than the current lowest HMO carrier, the new out-of-network benefit
would be available to all employees and having only one plan would significantly
increase our ability to negotiate rates.
The third option being considered, Dual Option Plus HMO, would reduce our current
offerings from four carriers to two carriers. You would have a choice between
a new Dual Option plan, as described above, or an HMO-only plan. It is intended
that the HMO would provide a less expensive alternative to the Dual Option plan.
With these two offerings, the out-of-network option would be available for those
who want it, we would have some increased negotiation leverage, and fewer employees
are likely to have to change physicians as may be the case under the second
alternative where there would only be one insurance plan.
We understand how important medical benefits are to you. Our goal is to choose the best option for all staff and faculty. A Staff Town Hall will be held in late January to discuss the topic further. Employees will receive email notification about the Town Hall when plans are finalized.
University of New Mexico
Albuquerque, New Mexico USA
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