A new analysis on how much Idaho would save by switching public employees to a self-insurance model puts the amount at $13 million for the first year of operation.
The analysis made public last week by Mercer, an actuarial consultant contracted by state officials, came as Republican gubernatorial candidate Tommy Ahlquist has repeatedly said that the state could save as much as $60 million over three years.
Under the plan, the state would pay for health insurance for about 45,600 state workers and family members directly rather than purchasing insurance through an insurance carrier known as a fully insured model. Idaho currently has a hybrid fully insured plan with Blue Cross of Idaho.
Mercer’s analysis did not forecast how much the state would save over three years.
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Idaho lawmakers have considered moving the state to a self-insurance system for several years and legislative leaders appointed an interim panel to review the topic for the past two summers, aiming for a final recommendation before the start of the 2018 session.
“We are 90 percent self-funded already,” said Jennifer Pike, the state’s group insurance program administrator, during the most recent interim panel’s meeting. “But we do pay (Affordable Care Act) fees and we do pay premium taxes and we cannot get away from those in our current structure.”
Ahlquist has highlighted the proposed switch as a solution to slashing what he calls wasteful government spending from the state’s general fund.
Ahlquist, a Boise businessman running for elected office for the first time, is running television advertisements promising to cut $100 million in state spending during his first 100 days in office if he is elected next year.
A key figure in that ad cites a 2016 report outlining a potential $60 million savings by switching state employees to a self-insurance fund.
Ahlquist said savings of $13 million by switching to the new insurance plan would be significant even though the savings do not represent an equivalent annual amount for the $60 million he has said would be saved over three years.
“This to me is a no-brainer,” he said in an interview last week at a campaign event.
Ahlquist did not provide any other details on how he would achieve the full $100 million of cuts to the state’s annual $3.5 billion budget.
“There are so many more things in the $100 million,” he said.
A new governor will take office in 2019 but the switch to the self-insurance fund could come before that. The interim panel’s lawmakers are scheduled to finalize their recommendation in October, which would be considered as early as January.