Thursday, October 14, 2004

State insurance plan outlined

House proposal improves benefits and lowers premiums

By Joe Biesk
The Associated Press

FRANKFORT - House lawmakers detailed elements of a state health insurance proposal that could avert a statewide teachers' strike this month.

When compared to the 2005 state health insurance proposed by Gov. Ernie Fletcher, the proposed fix would improve benefits and lower premiums for public school employees, state workers and retirees, said House Speaker Jody Richards, D-Bowling Green.

"I believe once we pass our bill that teachers, state employees, support personnel and retirees will be very, very happy about our plan," Richards said.

Fletcher called the General Assembly into a special session last week, hoping it could improve on the administration's 2005 health insurance plan - which has been met with a public outcry and a threatened teachers' strike if current benefits aren't restored.

The state's health insurance plan covers 229,000 retired and active public school and state employees. Participants have argued the governor caught them by surprise with expensive changes.

Teachers have threatened to strike Oct. 27 - less than a week before the November elections - if the current benefits aren't restored.

The proposal was made public late Wednesday night.

Among other things, the House proposal calls for standardizing employees' premiums across the state, and eliminates rates based on employee salaries. The proposal also calls for reinstating set co-pays in most instances.

Only one of the governor's previously offered benefit plans is included in the new proposal. The proposal also creates two new benefit structures, the "Commonwealth Enhanced" and the "Commonwealth Premier" plans.

The "Commonwealth Enhanced" plan is essentially the same as the current "PPO A" plan, which covers more than 50 percent of the state plan's participants.

The "Enhanced" plan calls for a $500 annual deductible for family coverage, with maximum out-of-pocket expenses capped at $2,500. It also has $10 set co-pays for doctor visits and generic medicine.

A nonsmoking single person making about $36,000, the average salary of state employees, would pay nothing for the plan, while family coverage would cost about $430. Under the administration's proposal, a similar plan would cost about $490.

The House proposal's "Premier Plan" has the same annual deductibles as the "Enhanced" plan, but the out-of-pocket expense for family coverage is capped at $2,000. Hospital stays are also cheaper under the "Premier" plan, which has employee premiums costing about $505.

Flexible spending accounts would be restored to $234 under the House plan.

The plan also calls for a retroactive pay increase of 2 percent for active public school employees and state workers from July 1 through the end of the year. They would also receive an extra 1 percent pay raise starting Jan. 1.

The four insurance companies awarded state contracts by the Fletcher administration - CHA Health, Anthem Blue Cross, Bluegrass Family Health and United Healthcare - would still carry the state's health plan next year.

The House planned to vote on the measure today.

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