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DCH takes steps to secure state health benefit plan
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The Georgia Department of Community Health (DCH) has adopted a broad-based proposal to secure the future of the State Health Benefit Plan (SHBP). Developed after a lengthy and thorough examination of revenues, expenses and plan coverages, the initiative introduces a new consumer-directed Wellness Plan, improves plan administration, eliminates SHBP’s projected deficit for this fiscal year and substantially reduces future deficits.

Georgia’s SHBP insures nearly 700,000 individuals, including active and retired state employees, teachers, non-certificated school personnel, and their dependents.

“The Board is pleased to endorse this thoughtful and responsible plan that is not afraid to tackle the big issues,” said DCH Board Chairman Ross Mason. “This is a forward-looking plan that provides real bottom-line driven solutions.”

“Overall, Georgia’s SHBP is well-managed, and while we make plan design changes and adjust member premiums every year, this year has been a particularly challenging one given the fiscal realities we face,” said DCH Commissioner David Cook.

“To secure the SHBP, we are addressing the causes of these deficits head on.”

SHBP is facing a projected deficit of slightly more than $800 million during the next two years — a projected deficit of $280 million in FY12 and projected deficit of $535 million in FY13. The deficits are a combination of increased costs due to the expanded mandated benefits in the Affordable Care Act and decreased revenues resulting from several years of tight budgets, the manner in which employer contributions are paid, and an increasing number of retirees.

“Our major concern is the continued delivery of quality health care services at an affordable cost,” Cook said. “Our recommendations going forward are fiscally responsible and fair, promote wellness and choice, and include administrative efficiencies, transparency and accountability.”

Georgia’s SHBP, one of the largest in the nation, continues to out-perform the national average by holding expenses to an average of 4.1 percent during the past four years. The national average increase in expenses is 8.3 percent during the same period.

A Focus on wellness

The plan promotes wellness and choice by introducing a new voluntary Wellness Plan, in addition to the Standard Plan, that encourages employees to participate in initiatives to maintain or improve their health. These new plans include increases in premiums effective Jan. 1, 2012.

• Standard Plan Premiums will increase 17 percent

• Base premium increase of 11 percent for all members

• Premium increase of 6 percent to support benefit expansions mandated by the Affordable Care Act

• Wellness Plan Premiums will increase 11 percent

• Base premium increase of 5 percent for all members

• Premium increase of 6 percent to support benefit expansions mandated by the Affordable Care Act

Overall, revenue from SHBP members will continue to represent approximately 25 percent of plan costs as SHBP moves away from the previous “percent of payroll” employer contribution model. This change will allow for a more accurate method of billing, making the system more transparent and accountable.

“These steps will help secure the future of the SHBP, but it is incumbent on us to address the long-term liability of the plan known as OPEB, or Other Post Employment Benefits, which during the next 30 years is estimated at $15.7 billion,” Cook said. “DCH is currently working on options to substantially reduce these long-term future liabilities. A healthy Georgia is paramount.”

The DCH Board approved the new plan for the SHBP at its Aug. 11 meeting.

About the Georgia Department of Community Health

DCH was created in 1999 to serve as the lead agency for health care planning, purchasing and oversight in Georgia. DCH is designated as the single state agency for Medicaid and the State Health Benefit Plan. The SHBP is operated as one plan but is comprised of a plan for state employees, a plan for teachers, and a plan for non-certificated school personnel. Combined, Medicaid, PeachCare for Kids and SHBP provide health care coverage for one in four Georgians.

In 2009, Healthcare Facility Regulation was created at DCH from sections transferred from the former Department of Human Resources, Office of Regulatory Services. The Office of Health Planning is also part of DCH.

To learn more about DCH and its dedication to A Healthy Georgia, visit www.dch.georgia.gov.