For Immediate Release - March 02, 2012

Group Insurance Commission Board Adopts Fiscal Year 2013 Rate Increases of 1.43 Percent

Lowest increase in Over a Decade with No Major Benefit Changes

BOSTON – Friday, March 2, 2012 - The Group Insurance Commission (GIC) voted today to adopt Fiscal Year 2013 premium rates that will result in the lowest average health insurance premium increase in over a decade. 

The average rate increase of 1.43 percent for Employee and Medicare plans combined is even lower than the Fiscal Year 2012 rate increase of 2.4 percent, which was achieved through a state employee health insurance re-enrollment and incentive to join limited network plans that offer the same benefits as broader network plans, but with fewer providers. 

"Controlling health care costs while ensuring better, more affordable health care for employees is a top priority," said Governor Deval Patrick. "The fact that we are seeing the lowest rate increase in over a decade is due in large part to the aggressive steps the GIC is taking to contain costs for employees' health care by successfully negotiating lower rates."

“The Group Insurance Commission has worked diligently to push the Patrick-Murray Administration’s health care cost containment objectives forward, while providing excellent benefits to our state and municipal workers,” said Secretary of Administration and Finance Jay Gonzalez. “I am proud that through their hard work, FY13 rate increases will be the lowest in over a decade.”

Compared to a study by Mercer Consulting which found that the national average rate increase for employer-sponsored health plans was 5.7 percent, these premium rate increases are the lowest achieved in Massachusetts since Fiscal Year 1999.

Since taking office, the Patrick-Murray Administration has undertaken an aggressive health care cost containment strategy to control health care costs while providing accessible high quality care. This strategy aims to leverage the state’s immense purchasing power to reward models that provide cost-effective, high-quality coverage and care to those who rely on state health insurance and to better coordinate government’s health care purchasing decisions.

The GIC has been active in taking steps to lower employees’ health care costs, including an aggressive cost containment strategy to control growth in insurance rates and to incent employees to move to lower cost plans. To date, 30 percent of active employees are enrolled in lower cost plans, saving the Commonwealth more than $20 million this year. The employees that moved to the lower cost plan in FY 2012 saved on average over $600 for an individual and over $1,400 for a family plan.

“These results are a testament to the joint efforts of the GIC’s staff, guided by the stewardship of Dolores Mitchell, and our health plan vendors,” said GIC Board Chairman Thomas A. Shields. “The GIC, in cooperation with its health plans, plays a leading role in providing quality benefits at affordable costs.”

“These low rate increases reflect a downturn of service utilization all over the country as well as the specific cost containment efforts of the GIC over the past few years,” said GIC Executive Director, Dolores L. Mitchell. 

Through last year’s three-month premium incentive to enroll in a limited network plan, the GIC achieved savings for both state employees and the Commonwealth.  Over 30% of state employees selected a limited network plan, a dramatic increase from 19% before the open enrollment period.  The GIC will continue to promote these plans, with potential premium savings when moving from a plan’s wider network to the limited network plans ranging from 20% to 27%.  Additionally, the GIC’s important Clinical Performance Improvement (CPI) Initiative is beginning its eighth year of operation.  With this program, members pay lower copays for providers with the highest quality and/or cost-efficiency score.

The GIC was established by the Legislature in 1955 to provide health, life, and other benefits to state employees, retirees, and their dependents. The GIC also covers housing and redevelopment authorities' personnel, participating municipalities, and retired municipal employees and teachers in certain governmental units.  There are currently over 200,000 enrollees and almost 375,000 lives covered by the GIC. A fifteen-member commission representing labor, retirees, municipal management, the public interest, the Administration, and expertise in health economics governs the GIC.