GovGuam could’ve saved $67.73 million on healthcare insurance over last five years

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Guam – Lawmakers held a short session yesterday(Mon.) with morning deliberations and afternoon voting. They overrode two bills one of which now requires that GovGuam pick the least expensive health insurance contract. The override drew strong criticism from Governor Eddie Calvo.

Speaker B.J. Cruz urged his fellow lawmakers to override the Governor’s veto of bill 3-34. The measure would require that GovGuam go with the most affordable health insurance plan even if it means going with an exclusive plan that doesn’t allow GovGuam employees to choose between providers. Speaker Cruz says if GovGuam went with the most affordable plan it would’ve saved $20 million dollars last fiscal year. “We’ve got to go with the most economical. We’ve got to save $20 million. We’ve got to save $20 million to either fund DOE we’ve got to save $20 million dollars to either fund GMH or we’ve got to save $20 million dollars to try to fund the various agencies that many of you have under your purview,” said Speaker Cruz.

The speaker was referring to numbers provided by the GovGuam health insurance negotiating team from FY2014 to FY2018. In FY2014 the team found that an exclusive contract would’ve saved $18.7 million from the contract for FY2013 which was $74.5 million. In FY15 Takecare insurance was scored as the highest ranked insurer offering an exclusive contract. This exclusive contract would’ve saved $6.2 million from the FY14 contract of $73.5 million. In FY16 Takecare was again scored as the best exclusive contract which would’ve saved $7.6 million from FY15’s cost of $79.5 million. In FY17 Takecare was again scored as the highest ranked exclusive contract. This contract would’ve saved $20 million from the FY16 cost of $93.1 million. In FY18 GovGuam again ranked Takecare as the highest exclusive contract offeror. This contract would’ve saved $15.23 million from FY17’s contract which cost $95.39 million.

Guam law requires that the negotiating team submit the most economical and beneficial exclusive health insurance proposal and up to three non-exclusive proposals. It is then up to Lt. Governor Ray Tenorio to decide which contract to pick in order to avoid a conflict of interest as Governor Eddie Calvo’s family owns insurance provider Calvo’s Selectcare. Tenorio has opted to go with the non-exclusive contract over the last five years. Over the last five years the exclusive contract would’ve saved GovGuam, its employees and retirees a total of about $67.73 million in health insurance premiums.

Ultimately the veto of bill 3 was overridden with a vote of 11-4. Senators Wil Castro, Tommy Morrisson, Louise Muna and Dennis Rodriguez Jr. voted no. This means GovGuam is now required to pick the least expensive option.

The governor’s office responded with a release criticizing the override for taking choice away from GovGuam employees, retirees and their families. The administration says the governor vetoed the bill last year because if it had been passed into law “the people who rely on GovGuam health insurance would not have been able to go to the Seventh Day Adventist clinic or the Guam Regional Medical Center.” Takecare insurance currently does not have an agreement in place with the SDA clinic or the Guam Regional Medical Center. The governor’s office says that while Speaker Cruz touted the 20 million dollars this contract would’ve saved GovGuam “that savings could be artificial. In negotiations last year, one of the bidders didn’t have a contract with the Guam Regional Medical Center or the Seventh Day Adventist clinic.” The governor’s office says the current health insurance contract allows GovGuam employees to choose the insurance company that offers the services and providers that best fits their family’s needs.