Hagåtña, Guam – Despite claims from certain politicians with ties to the insurance industry, the self-insured GovGuam health insurance plan negotiated by the Government of Guam’s Health Insurance Negotiation Team will result in lower premiums than it would if a contract was not self-insured. According to a third-party actuarial report provided by Milliman, total premiums were predicted to go up by 15% this year. However, by self-insuring the health insurance coverage, employee and retiree premiums for those who currently have SelectCare will actually go down, and premiums for those who currently have TakeCare will only increase by 5 to 8% compared to 15%.
This is because, unlike off-island private insurance carriers, GovGuam does not have to make a profit. Premiums paid by GovGuam employees and the government contribution towards those premiums will be set aside in an account to build up a reserve that can be used to further drive down premiums in subsequent years rather than belonging to private shareholders. As for concerns that there is currently no reserve to handle catastrophic insurance claims at plan inception, GovGuam will be entering into a stop-loss insurance contract to cover catastrophic claims above a specified level.
Senator Frank Blas Jr. has claimed that the current dental and pharmaceutical claims have not been paid. This is false. He has also claimed that dental and pharmaceutical claims were higher than the premiums GovGuam collected. This is also unsubstantiated. If the claims cost more than the premiums, there is no way private companies would be able to afford to insure GovGuam without significant premium increases. No private carriers would ever bid competitively on GovGuam health insurance.
Senator Blas has also introduced a bill to roll over the current GovGuam health insurance contract for another year. This bill would violate the Constitution and expose the government of Guam to lawsuits, as it would impair the obligations of previously negotiated contracts. The current contract does allow for a 90-day extension, but anything beyond 90 days requires a renegotiation. It does not allow for an extension of an entire year at the same rate, which means these private insurers cannot be forced to extend the same premiums for an entire year. In fact, as mentioned previously, private insurers were expected to raise premiums this year by about 15%. The Government of Guam would not be able to force these private insurers to provide health insurance coverage at the same rate for another year.
It’s unclear why Senator Blas has taken this position; however, it should be noted that Senator Blas owns an insurance brokerage firm called Frank Blas & Associates, Inc. This alone should cause a question of motive, and it could also potentially require his recusal from this entire process.