Medical Plan Bid

Medical Plan Bid Explores Possible Changes

As part of UC’s ongoing efforts to preserve quality employee medical ben-efits and services while managing rising costs, the University in Febru-ary invited medical insurance vendors to submit competi-tive bids for most of its medical plans.

Health care costs con­tinue to rise everywhere, and many employers are having to pass those costs on to employees and/or reduce benefits. The goal of UC’s 2007 bid process is to explore potential adjustments to the number of medical plan vendors in order to continue to provide meaningful choices and high-quality comprehensive medical care while keeping costs to employees affordable.

Meaningful Plan Choices
"Providing medical benefits that provide quality and are affordable to our faculty and staff are key outcomes of this bid," said Randy Scott, UC’s executive director of Human Resources and Benefits Policy and Program Design. "Our aim is to maintain, and in some cases improve, employees’ choice and access to medical ben­efits that best fit their needs while continuing to control the effects of rising costs."

"Meaningful choice" could mean that the range of UC medical plan choices is aligned more closely with employees’ needs for medical care, the way they actually use their plans, and their financial resources. For example, those who rarely see a doctor or who are willing to take active control of their health may be able to choose a less costly plan, while those who require greater levels of medical care may be able to choose a higher-cost plan with lower out-of-pocket expense.

In addition, UC is examining the possibility of retaining specialty vendors to provide certain benefits and services, such as prescription drug benefits, mental health services, or chronic disease management, across all basic medical plans. Specialty providers may be able to offer higher quality and better value when compared to providing those benefits separately within each plan. In addition, with this approach UC may be able to leverage the power of its size—nearly 113,000 employees and 37,000 retirees—to negotiate the best premium rates it can.

Kaiser, Salary Bands Remain
While the bid process may lead to some changes in the medical plans offered, other parts of UC’s current medical plan array will not change. UC’s group HMO plans—Kaiser Permanente and Western Health Advantage—will remain among the choices for 2008. And UC will continue its salary banding approach, which ensures that those employees earning the least will continue to pay the lowest premiums.

The bid process and vendor selection will con­tinue through the summer. UC will continue to consult widely with faculty and staff groups, administrators and the unions who represent University employees. UC will comply with collective bargaining requirements for repre­sented employees as appropriate. Any medical plan vendor changes will be announced prior to Open Enrollment.

"We are very enthusiastic about this approach to our medical plan offerings. We think it positions us well for the future, given all that is happening in the health care industry," said Scott. "We know that faculty and staff will have many questions, and we will be doing all we can to keep them up to date as the bid process goes on. Most important, if changes are to occur, we will give employees all the tools and information they need to make informed Open Enrollment decisions as early as possible."