Hagåtña, Guam – The Government of Guam will be fully self-insuring for its Fiscal Year 2024 GovGuam Group Health Plan. Though coverage and benefits will remain generally the same as prior years, employees can expect lower premiums than they would have paid with a private insurance carrier.
Under this self-insurance model, rather than contracting with an insurance carrier, the government of Guam itself provides health insurance benefits, which are administered through a third-party administrator. Instead of paying premiums to off-island insurance carriers who control the review and payout of claims, this model ensures that our government retains control over premiums and the claims process. Though we currently contract with local insurance companies that our people are familiar with, the reality is these local companies serve as brokers for large off-island insurance groups. These local companies sell and administer insurance policies on behalf of these off-island insurance groups, effectively acting as third party administrators for these carriers.
Under this self-insurance model, a local third-party administrator will continue to collect premiums from all GovGuam units, and instead of remitting our premiums to off-island carriers, the administrator will remit them to the established GovGuam fund. The government in turn will remit payments to the administrator to resolve claims. The self-insurance will allow for a claims resolution process that is more beneficial to our hard-working government employees and their families. This model will also allow our government to lower premiums once reserves are built up and offer more customized benefits to our subscribers.
Many other states and large risk groups have moved toward adopting similar self-insurance models due to their cost-effectiveness and flexibility, and the control these models provide over the claims process. While critics suggest that self-insurance is not workable for our island, the fact is that GovGuam already uses self-insurance to pay for dental and pharmaceutical coverage. In fact, GovGuam has self-insured dental coverage for the last two years through an exclusive contract with a third party administrator.
Based on the data the Negotiating Team has provided, Governor Leon Guerrero has determined that the Guam Code requires an exclusive administrator for a self-insured plan, and has authorized the following selection for FY24:
(1) a self-funded arrangement for medical benefits with SelectCare acting as the exclusive Third-Party Administrator: (2) a self-funded arrangement for pharmacy benefits with SelectCare acting as the exclusive Third-Party Administrator, and (3) a self-funded arrangement for dental benefits with NetCare acting as the exclusive Third-Party Administrator (4) a self-funded arrangement for coverage for Foster Care children with SelectCare acting as exclusive Third-Party Administrator.
“We have been working toward this self-insurance model for years, and I am pleased that we are ready to fully take advantage of its benefits, as many other states and groups around the country have,” said Governor Leon Guerrero. “Through this self-insurance model, our government will save more money on health insurance in the long run, while improving the benefits we provide to our employees and their families.”