Painless way to save $40 million in HUSKY

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Our new policymaker issue brief outlines how moving HUSKY to self-insurance should save the state at least $40 million, without any changes in access to care. In 2008, under the PHIP/ASO model medical costs were actually lower than under HMO capitation the next year. Because the shift to self-insurance was sudden DSS was in a poor negotiating position . The administrative fees paid to the HMOs were $5 per member per month higher than the HMOs spent the next year – when they were spending their own money. As the state is now in more deliberative negotiations with the HMOs, it is possible to secure more reasonable administrative rates. Together, the lower medical costs and more reasonable administrative fees could result in significant savings to the state. Both SustiNet and the current state budget require self-insurance for HUSKY. If DSS chooses to re-bid the program rather than limiting negotiations to the current HMOs, we could save more and potentially engage partners with larger provider panels – easing the severe shortage of providers willing to see HUSKY patients.
Ellen Andrews