Insurance bill for retirees may impact thousands

A bill to bring back government retirees into the government’s health and insurance plan could face rough waters in the Legislature, considering its possible impact on thousands of existing insurance holders.

Sen. Justo S. Quitugua (Ind-Saipan) earlier introduced Senate Bill 19-10, which seeks to allow retirees to enroll back in the government’s health insurance program anytime they wish to, instead of just within six months after they retire, as mandated by Public Law 15-70.

According to Quitugua, SB 19-10 is expected to benefit some 900 to 1,000 retirees who have opted out of the government insurance plan.

SB 19-10 was calendared for final reading during the Senate session on Tinian last week, but questions arose about its potential impact on existing insurance policy holders.

One of the concerns on SB 19-10 is that it is likely to increase the existing rates of government insurance holders.

Aetna Global is the insurance provider for government employees after the Department of Finance renewed the deal until the end of fiscal year 2015 in September.

Sen. Arnold Palacios (R-Saipan) said that retirees going back into the plan will have more health and insurance needs, which in turn might prompt higher rates.

Impact

About 3,000 government employees could be affected, according to Senate President Victor B. Hocog (R-Rota).

Hocog added that if the 900 to 1,000 or so retirees are allowed to go back to the government insurance plan, the government needs an additional 500 employees just to keep the rates or lower the rates a bit.

“Where do we find the 500?” Hocog asked.

He also said bringing in the 900 to 1,000 retirees on the Aetna insurance “today” may also affect the government to the tune of $1.2 million in additional payments by the end of the fiscal year.

This is why lawmakers have asked Finance Secretary Larrisa Larson to coordinate with Aetna Global, Hocog said.

Hocog said one possibility is for the government to bring retirees who previously opted out back to the insurance plan little by little and see what kind of impact this will have.

He said data is needed from Aetna on what will happen to the existing insurance rates if, say, 25, 50, or 100 retirees are brought back in.

Hocog said “the best for us is to get information from Aetna” and see how flexible the insurance provider can be. He also added that, “Aetna has been very helpful to the government.”

Noble intent

Hocog said he understands the noble intent of Quitugua’s bill, but lawmakers would have to be very careful.

“We might satisfy the 900 to 1,000, but we might hurt the existing plan holders,” Hocog said.

The lawmaker said a bill is now being discussed in the House to make it mandatory for autonomous agencies to enroll in the program specifically for this purpose.

But this may not solve the whole problem, Hocog said, adding that the bill is still with Rep. Angel Demapan (R-Saipan).

“I know that it is a noble intent to bring back the retirees, because they don’t have anything. But we would have to be very careful,” Hocog said, adding that “any additional increase” might compel existing plan holders to pull out.

While acknowledging the intent of Quitugua’s bill, Hocog did not discount the possibility that S.B. 19-10 might be scrapped.

“We will probably wait for the House version, and probably amend it later,” he said.