Missouri Proposal Adds New Layer of Bureaucracy

Published April 1, 2003

Missouri State Senator James Mathewson (D-Sedalia) has introduced a measure he says would give the state more “buying power” by combining into a single plan the myriad health plans offered to government employees in the state.

Mathewson’s opponents reject the single-payer approach as expensive and less effectively tailored to employee needs.

SB 450, introduced in the Senate Ways and Means Committee, would create a new agency of state government, the Division of Community Health, which would be empowered to combine into a single plan the various health care programs offered to government employees in the state. By putting all government employees into the Missouri Consolidated Health Care Plan (MCHCP), Mathewson said he expects to be able to increase the plan’s purchasing power, thereby saving the state money.

Consolidation, according to its supporters, is advantageous because it allows government employees to benefit from what is essentially a larger group discount. They note Georgia employs a plan like the one Mathewson is proposing, and West Virginia and Delaware are considering a similar course of action. One opponent noted out loud at a public hearing, “that may explain why health insurance is so expensive there.”

According to other detractors of Mathewson’s plan, consolidation would mean the creation of a de facto single-payer health plan for all government employees, from municipalities to higher education to the state capitol.

University Penalized

Officials at the University of Missouri (UM) are among the Mathewson plan’s most prominent opponents. UM employees would experience cost increases if their plan were folded into MCHCP.

Even without the proposed consolidation, MCHCP is already almost three times larger than the UM health care program, noted Ken Hutchinson, the university system’s vice president of human resources. But MCHCP’s allegedly better “purchasing power” has not meant lower premiums. “Bigger is not better for the UM system,” said Hutchinson. “UM [insurance] premium rates are much lower than what the Missouri plan offers.”

The UM health plan is a self-funded private-sector arrangement with United Health Care. It has consistently offered UM employees a wide variety of insurance choices while keeping premium inflation well below the national level, as well as below the premium increases experienced by MCHCP–which is again looking at double-digit increases for 2004.

According to Hutchinson, the costs to the University and its faculty, staff, and retirees would increase approximately $55 million a year if UM is included in Mathewson’s consolidation arrangement. Faculty and staff members would pay nearly double their current premium rates for health insurance.

Because the health plan is an integral part of UM’s overall human resources and employee benefits strategy, the Mathewson measure would force the UM Board of Curators to relinquish authority to govern its overall compensation program.

“The proposal has the effect of penalizing the University of Missouri for operating a well-conceived and efficiently managed program,” Hutchinson said.

Devil in the Details

To achieve cost-efficiency goals, SB 450 would “streamline” the state’s health care efforts with a new layer of bureaucracy. According to the text of the bill itself, “The goal of the Division of Community Health will be to focus the purchasing power and streamline the administration of the state’s health care purchasing. The Division will have a board and a Commissioner. The Board will consist of eleven members. Two members will come from the legislature, one is the Director of the Department of Insurance, one is the Director of the Office of Administration, and the others are representatives or directors from the various groups that are assimilated under the Division of Community Health.”

If passed, the bill would require the new Board to submit a report to the legislature by December 31, 2003 providing an analysis of its duties and recommendations concerning personnel or other matters. By July 1, 2004, the health care programs offered all government employees and state university employees, the Missouri Senior Rx program, and the state division of medical services would be assimilated into the new Division of Community Health.

Later in 2004, the measure begins to extend the reach of the single-payer plan beyond government employees. On December 1, the bill says, “Four new members will be added to the Board. The new members will be appointed by the Governor. One will be from the Missouri School Boards Association, one from the Missouri Community Colleges Association, and two will be representatives of small business. A subsequent report will be due from the board on 12/31/05 to update the prior report and provide any recommendations for implementation of the next phase of the program.”

This final phase of Mathewson’s plan would allow the Division to make the new consolidated plan available to public school employees, community colleges, and all political subdivisions of the state–as well as private-sector businesses with fewer than 50 employees and uninsured citizens in the state.

“Goofy Idea”

If Mathewson’s measure passes, the new 11-member Board of the new Division of Community Health would be appointed. It would meet, research, analyze, discuss, and propose by December 31 the best plan for managing the state’s health insurance needs.

Consolidation would not happen until July 1, 2004, and then only if the Board recommends that action. “If their report says consolidation is a goofy idea, I’ll kill everything else in this bill,” Mathewson pledged.

Conrad F. Meier is managing editor of Health Care News.