A state panel decided Friday that it needs more information before it can decide whether to create a self-insured plan for Wisconsin state employees.
A committee of the state's Group Insurance Board put off a decision on what to do next until November, saying it first wants more information about the highest insurance and prescription drug costs under the current structure.
"You really need to have that data to make a solid step forward," said committee member Terri Carlson, policy adviser for the state insurance commissioner's office.
Currently, about 236,000 state employees and their family members get their insurance from 18 health maintenance organizations. Under a self-insurance approach, the state would carry the risk for losses and pay benefits directly to employees, instead of buying insurance from the private market.
Gov. Scott Walker supports examining the issue but has not supported any particular approach yet. The state Department of Employee Trust Funds recommended that a request for proposals be issued to gather additional information about the potential costs and savings of making such a move.
But a subcommittee of the Group Insurance Board, which oversees state employee health benefits, decided that before issuing any request for proposals, it needs more details about costs under the current system. It plans to revisit the issue at a Nov. 12 meeting.
A report by Deloitte consultants said the state could save 4 percent to 5 percent per year by becoming self-insured, with savings mainly coming from taxes and fees imposed for fully-insured programs under the federal health care law.
Walker said the imposition of those taxes and fees led to the consideration of the self-insurance approach.
Consideration of changing the system has drawn opposition from the Wisconsin State Employees Union as well as the Wisconsin Association of Health Plans, which represents 10 of the 18 HMOs that currently provide coverage to state workers.
Phil Dougherty, senior executive officer of the Wisconsin Association of Health Plans, said he was pleased that the board decided Friday to get more information before moving forward.
"This is a significant decision," he said. "The question of self-funding poses risks to the state, particularly the health insurance market."
Dougherty's group estimates that changing to a self-insurance model would eliminate 15 percent of the state's fully-insured insurance market.
Even if a change were made, the earliest it could take effect would be 2015.