New law requires GovGuam to select the most affordable insurance plan
Voting 11-4, senators overrode Gov. Eddie Calvo’s veto of a bill that would require the government of Guam to contract just one provider that offers the most affordable insurance plan.
Speaker Benjamin Cruz, author of the Bill 3-34, said the legislation can save GovGuam millions of dollars in future health insurance contracts. With the enactment of the measure, only the most “economical” health insurance contract will be forwarded to Adelup for signature—provided that covered benefits remain the same under law, the speaker said.
“With the government of Guam on the brink of payless paydays, this bill is common sense,” Cruz said. “Health benefits will stay the same, and taxpayers get the best deal possible for their tax dollars.”
The override is part of Cruz’s concerted effort to responsibly cut costs without reducing basic community services. Just last week, the Office of Finance and Budget reported that the recently-enacted Tax Cuts and Jobs Act of 2017 would reduce income tax revenues by approximately $67 million between the months of February and September 2018 alone.
Under Bill 3-34, which is now a public law, only the “most economical and beneficial” contract will be sent to Adelup for signature regardless of whether that contract is exclusive or nonexclusive—removing the Administration’s ability to spend more than appropriated without further legislative action.
“Bill No. 3-34 recognizes our fiscal crisis and acts accordingly. If choice gives us the best deal—sign it. If a consolidated vendor means millions saved with the same benefits, sign that,” said Cruz.
The measure was Cruz’s first piece of legislation in the 34th Guam Legislature in reaction to the Calvo-Tenorio Administration consistently choosing the health insurance contract costing millions more than its alternative. According to previous Health Insurance Negotiation memos, over the last four fiscal years, choosing an exclusive option would have saved taxpayers at least $53.6 million, when compared to the nonexclusive alternative.
“We all want choice and I respect that. But, if we lose health insurance because we can’t afford it, thousands of people will have no choice at all,” said Cruz.
Sen. Frank Aguon, who voted for the veto override, said options can be revisited later. I have always supported granting our GovGuam family a choice in healthcare providers. However, the financial crisis before us and the state of our hospital has forced everyone to reconsider their position and spending priorities,” he said. “At this juncture, we have to ensure that our GovGuam family not only has the best health insurance, but that we can continue to pay for this health insurance for the entire fiscal year. We can revisit our options at a later time but we’ve got to do what’s best at this time, and what is best is what is most prudent."
Smarting from the senators’ veto override, the Calvo administration said the shrunken insurance plan option would limit the choice for more than 7,000-plus GovGuam Guam employees, retirees, and their families.
“If it had passed into law last year, the people who rely on GovGuam health insurance would not have been able to go to the Seventh Day Adventist Clinic or the Guam Regional Medical Center,” Adelup said in a press release. “GovGuam employees to choose the insurance company that offers the services and providers — local and off-island — that best fits their family’s needs.”
The administration said the savings that could be generated from the single-insurance plan option is “artificial.”
“In negotiations last year, one of the bidders didn’t have a contract with the Guam Regional Medical City or the Seventh Day Adventist Clinic,” the administration said.
Those who voted for the override were Cruz, Aguon, Sen. Tom Ada, Sen. Jim Espaldon, Sen. Fernando Esteves, Sen. Regine Lee, Sen. Telena Nelson, Sen. Joe San Agustin, Sen. Mike San Nicolas, Sen. Therese Terlaje, Sen. Mary Torres.
Sen. Wil Castro, Sen.Tommy Morrison, Sen. Louise Muna and Sen. Dennis Rodriguez voted against the override.