Change to state workers’ health insurance plans was ‘seriously mishandled,’ Massachusetts Attorney General Maura Healey says

Jan. 23--A major change to Massachusetts public employees' health insurance plans was "seriously mishandled" and should be reconsidered, state Attorney General Maura Healey said Tuesday, adding that she's heard from "terrified" state workers.

The Group Insurance Commission (GIC) manages insurance for over 400,000 state employees and retirees.

The GIC went through a process to decide which plans to allow in for coverage, and is seeking to remove Tufts, Harvard Pilgrim Health Care and Fallon. The move will save the state $20.8 million, according to the GIC.

Starting on July 1, the number of plans will drop to three, including UniCare, Neighborhood Health Plan and Health New England.

Appearing on WGBH's "Boston Public Radio" show, Healey expressed surprise at the move, questioned whether the savings are worth it, and said her office is "trying to get to the bottom" of what happened.

"This is a situation that was seriously mishandled, I think, and lacking in the appropriate transparency, and from the calls that I've received in my office over the last week, this is a huge deal," Healey said.

"So we've got employees, right now, who are terrified about what this means in terms of their coverage or coverage for their kids," Healey said.

The move has drawn the ire of unions and other state officials, including Acting Senate President Harriette Chandler, D-Worcester.

"GIC leadership continues to engage with union leadership and other key stakeholders about how this vote will help ensure members can keep their doctors, hospitals and benefits," Ashley Maagero Lee, a GIC official, said in an email.

"This procurement was done to maintain high-quality benefits and doctor choices while saving GIC members and the state money," Lee added. "We anticipated health care cost increases of 5% or more for GIC members without these changes."

But Healey said the GIC should "very seriously consider" its decision.

"The problem I have with this is that this was done through a procurement process but with very little information [to] the public, and to my mind, it was voted on at a time when GIC didn't have an economist in place on the board," Healey told WGBH.

"I don't know what this is truly going to mean in terms of the impact on premiums, what is this going to mean not only for people who between now and July 1 have to scramble to find out if their doctor or their kid's doctor is within the network of the other remaining insurance plans," Healey continued.

Healey also questioned the move's impact on the state's health insurance market. "You've just booted three Massachusetts insurance companies out of this market and some of the out-of-state providers like UniCare, they pay less in reimbursement to our hospitals and providers," she said.

"Twenty million dollars, it sounds like a lot, it's not a lot in terms of savings in my view, given the complete disruption this has caused," Healey said. "At the end of the day, maybe it was the right move but we do not have the answers."

Last week, Gov. Charlie Baker defended the change while saying the GIC should better communicate the change to the unions.

The GIC was acting on concerns from state workers about rising premiums and out-of-pocket spending on health care, according to Baker.

"The case they made to us was this would be for...practically everybody, there would be no changes with respect to their access to their current physicians and other clinicians," Baker told reporters. "That it would dramatically limit the increase in out-of-pocket premium contribution spending, and the plan designs would be very consistent with what they already have."

This post was updated with a comment from the GIC.

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