Attached is the annual report of the Small Employers Insurance Board (Board) as required under Section
635.23, Wis. Stat.
The report discusses, among other issues, the performance of the Small Employer Health Insurance Basic Plan. In evaluating the performance of this Plan which requires small group health insurers to offer a guarantee issue product, the Board expressed a desire to communicate opinions to the Legislature on how the performance of this plan could be improved.
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Since some of the proposals discussed by the Board lie outside of its jurisdiction, it was felt that they be communicated separate from the annual report. In particular, the Board identified the following suggestions:
1. The provisions in the state statute for the Basic Plan should be amended to allow for two policies, one with a high annual limit on coverage and one with a low annual limit. The low annual limit of $30,000 in benefits was identified in a recent survey as one of the more negative aspects of the benefit design preventing employers from purchasing policies.
2. Statutes mandating an employer contribution should be amended to allow for employees to pay more of the premium, rather than not be eligible for the Basic Plan because an employer could not afford to contribute to premiums.
3. Expand the effects of Chapter
635, Wis. Stat. to apply to larger groups (for example up to 100 employees).
The Board felt that these changes would improve the marketability of Basic Plan policies by insurers.
The Board has also asked me to express their desire to discuss these provisions with members of the Legislature at a later meeting.
Should you have any questions, please contact me, or Peter Farrow at 264-6239.
Best regards,
josephine W. musser
Commissioner of Insurance
Referred to committee on Health.
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State of Wisconsin
Office of the Commissioner of Insurance
Madison
June 30, 1995
To the Honorable, the Assembly:
In accordance with s.619.15 (2), Wis. Stat., I am pleased to submit the annual Report of the Wisconsin Health Insurance Risk-Sharing Plan (HIRSP). The plan was established in 1981 and now offers health insurance to 11,264 Wisconsin residents.
The major issue on the HIRSP agenda continues to be cost containment. In addition, the HIRSP Board of Governors and the Wisconsin Office of the Commissioner of Insurance (OCI) have also taken several steps toward policyholder education. Highlights of the past year include:
ENROLLMENT
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As of December 31, 1994, there were 11,264 Wisconsin citizens enrolled in HIRSP, compared to 11,514 at the same time last year. A table summarizing enrollment trends for the eighteen month period ending December 31, 1994 is included as Attachment 1.
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Enrollment has been on the decline due to small group insurance reform, as well as a steady increase in premiums. A survey of policyholders who voluntarily terminated HIRSP coverage during 1994 indicated that approximately 50 percent had obtained other insurance coverage.
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34% of enrollees receive a subsidy to lower their premiums and deductibles, compared to 32% in 1993. Premium and deductible subsidy payments during the year totaled $2.8 million.
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70 % of HIRSP policyholders are age 45 and older. 30% of all policyholders are between ages of 60-64.
INCOME
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Assessments on insurers totaled $20,140,000 in calendar year 1994, an increase of 12 percent over 1993 collections. A table summarizing assessment trends in included as Attachment 2.
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$24,871,927 in premiums were collected for calendar year 1994, a decrease of 3 percent over 1993 collections.
CLAIMS
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Total plan expenses during the year were $45,201,903. Administrative costs account for less than 5 percent of total plan expenses.
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$48,184,458 was paid in claims for 1994 versus $46,257,835 in 1993. Of this amount, $19,484,733 was for inpatient claims, $21,661,656 was for professional services, and $7,038,069 was for outpatient claims.
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Psychosis, diagnostic related group (DRG) number 430, continues to be ranked first by total inpatient payments, but accounted for less than 10 of the total admissions for HIRSP policyholders.
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Circulatory disorders continue to be the most costly major diagnostic category for HIRSP enrollees accounting for 25 percent of total inpatient payments.
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The average per member per month cost of the Plan in 1994 was $356.00. Twenty-five percent of all outpatient services were for Drugs/Supplies, which averaged $45.06 per member per month.
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The most expensive hospitalization was for a primary diagnosis of bone marrow disorder/surgery for which a total payment of $157,806 was made.
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The most utilized hospital in the state was University Hospital in Madison, accounting for 8 percent of total inpatient days. St. Luke's Medical Center in Milwaukee received the highest total payments for inpatient care.
COST CONTAINMENT
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Starting May 1994, HIRSP entered into a contract with Meridian Resource Corporation to audit high cost inpatient and outpatient hospital claims. During the first year of operation, the contractor reviewed 205 claims. Of these, sixteen claims were selected for audit with total estimated savings to HIRSP of $7500.
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A drug card program, expected to save HIRSP funds was authorized by the Board for implementation during 1995. Total estimated savings for the two programs is approximately $800,000 annually.
POLICYHOLDER EDUCATION
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The Consumer Affairs Committee created by the Board of Governors (Board) to assure policyholders that the Board receives input from policyholders continued to meet. During the year, the plan published three editions of a quarterly newsletter to inform policyholders about changes in the plan, health care reform, etc. Topics addressed during the past year included introduction of key personnel at Blue Cross/Blue Shield, information on how plan premiums are determined, responsible plan usage, and an explanation of the subsidy program.
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During the year, the Blue Cross customer service area received 65,436 calls. The call abandonment rate declined from 8.8 percent to 4 percent during the year.
I am confident that the HIRSP Board of Governors will continue to explore additional cost-containment options for the plan, which will prove to be beneficial to both HIRSP enrollees and the state of Wisconsin.
The data continues to show that HIRSP remains as a viable alternative for health insurance for Wisconsin citizens. Please contact Eileen Mallow of my staff if you have any questions.
Best regards,
Josephine W. Musser
Commissioner of Insurance
Referred to committee on Insurance, Securities and Corporate Policy.
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State of Wisconsin
Department of Administration
Madison
June 30, 1995
To the Honorable, the Legislature:
As required by
1993 Wisconsin Act 351, I am submitting to you for distribution to the appropriate standing committees under s. 13. 172 (3) of Wisconsin law the second semiannual
Wisconsin Gasohol and
Alternative Fuel Use Report. If you or any committee members have questions, please contact Nathaniel E. Robinson, Administrator, Division of Energy and Intergovernmental Relations at 608/266-7257.
Sincerely,
james a. klauser
Secretary, DOA
Referred to committee on Environment and Utilities.
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State of Wisconsin
Department of Health and Social Services
Madison
June 30, 1995
To the Honorable, the Legislature:
1989 Wisconsin Act 31, Section
1118i, requires the Department of Health and Social Services to submit to the chief clerk of each house of the legislature a report on June 30 annually on the allocation and expenditure of funds for services for homeless individuals. Attached is the Department's fourth annual report.
Departmental staff are available if you have any questions or require any additional information.
Sincerely,
richard W. Lorang
Acting Secretary, DHSS
Referred to committee on Health.
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State of Wisconsin
Office of the Commissioner of Insurance
Madison
July 1995
To the Honorable, the Legislature:
Pursuant to the requirements of section 153.20, Wis. Stats., we are pleased to submit to the Governor and the Legislature Uncompensated Health Care, Wisconsin Hospitals, FY 1994. This report, prepared by the Office of Health Care Information, sets forth the total charges for charity care, bad debt, and total uncompensated health care for hospital fiscal year 1994; the projected total charges for hospital fiscal year 1995; the number of patients receiving uncompensated health care for hospital fiscal year 1994; and the projected number of patients who will receive uncompensated health care in hospital fiscal year 1995.
The information contained in this report was obtained from data submitted by Wisconsin hospitals on their annual FY 1994 Hospital Uncompensated Health Care Plan and their annual FY 1994 Hospital Fiscal Survey.
Sincerely,
Josephine W. Musser
Commissioner of Insurance
Trudy A. Karlson, Ph.D.
Director, OHCI
Referred to committee on Health.
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State of Wisconsin
Office of the Commissioner of Insurance
Madison
July 6, 1995
TO: Charles R. Sanders
Assembly Chief Clerk
FROM: Josephine Musser
Commissioner of Insurance
DATE: July 6, 1995
RE: Governor's Task Force on Hospital and Academic Medical Center Costs
The Task Force has completed its work and has prepared the attached document for your review. The Task Force was active, creative and productive -- resulting in a set of recommendations for resolving the problems identified in the
1993 Wisconsin Act 447. The first part of the document is a policy brief, the second part is a more detailed Technical Report.
The Office is available to clarify the information in the report and to provide support as needed.
Referred to committee on Health.
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