By Pacific Island Times News Staff
The government of Guam will be fully self-insuring for its fiscal year 2024 GovGuam Group Health Plan, which according to the governor's office will streamline the claims process and cut the premium,
"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," according to a press release from the governor's office.
Officials said employees can expect lower premiums than they would have paid with a private insurance carrier while getting the same coverage and benefits they have been receiving under the current plan.
"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," the governor's office said.
"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," the governor's office said.
Instead of paying premiums to off-island insurance carriers that control the review and payout of claims, officials said the new model ensures that the government retains control over premiums and the claims process.
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.
Officials said 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, Gov. Lou 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:
a self-funded arrangement for medical benefits with SelectCare acting as the exclusive third-party administrator:
a self-funded arrangement for pharmacy benefits with SelectCare acting as the exclusive third-party administrator, and
a self-funded arrangement for dental benefits with NetCare acting as the exclusive third-party administrator
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,” the governor said.
“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," she added.