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UC seeking bids this year for 2014 medical plan offerings

Although Open Enrollment for UC-sponsored benefits is still months away, UC has begun its annual evaluation of health and welfare benefits to find ways to reduce costs for the university, employees and retirees.

This year, systemwide HR will consider proposals from new and current medical plan vendors in an effort to limit cost increases while continuing to provide high quality medical insurance plans to employees and retirees.

Only Kaiser, Western Health Advantage (WHA) and Optum, the mental health insurance provider, are not part of the bid process and are certain to be offered next year. All other current vendors and any interested new vendors can submit proposals to provide medical insurance for employees and retirees.

“Over the past three years, we’ve done a good job of reducing the percentage increase of premiums with our current carriers, but we have done all we can do under the current structures without simply shifting more of the costs to employees and retirees,” said Dwaine B. Duckett, vice president of systemwide Human Resources.

“The university continues to face significant budget pressures, and a comprehensive review of our medical plan offerings is an opportunity to help UC meet its fiscal challenges,” he said. Potential vendors have until mid-February to submit a proposal, and the highly confidential evaluation and negotiation process with prospective insurers is expected to continue through mid-summer.

UC currently has 13 vendors providing medical, dental and vision insurance at a cost of $1.86 billion for 2013. The university covers 86 percent of that cost, or about $1.5 billion. UC periodically conducts a comprehensive review of its medical plans. The last such review was seven years ago, and the health care landscape has changed significantly since then.

“As a result of health care reform and changes in the industry, there are a lot of new products and ways to provide health care,” Duckett said. “It’s time to go into the marketplace and see if these products can help meet our goals of providing high-quality benefits while controlling costs.”

Duckett points to examples such as a new accountable care arrangement offered through the Health Net Blue & Gold plan in San Francisco. The arrangement is a partnership among UCSF Medical Center, Hill Physicians medical group in San Francisco and other partners to provide greater coordination of care in order to give patients more support and a better quality of care while containing costs.

UC medical centers, medical insurance providers and others are developing similar types of products to make health care more efficient and affordable.

“We also want to look at ways we can access our own medical centers to be sure the world-class care they provide is available to and affordable for our employees and retirees,” Duckett said.

For example, a self-funded medical plan that includes UC medical centers and doctors among its providers is an option that will be considered during the bidding process. Many large employers offer self-insured plans because of the financial advantages they provide since the employer, rather than an insurance company, directly pays for plan costs.

Decisions on using any of these cost-saving methods and the results of the medical plans bidding process are still months away.

“We remain firmly committed to providing quality benefits for our employees and retirees,” said Duckett. “I think we can safely say that faculty, staff and retirees are likely to see changes next fall during Open Enrollment.”

See the full story on the At Your Service website, and watch for more details in the coming months.

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