THE government of Guam health insurance contract over the past two years has exceeded $77 million each year. Data directly from the government’s current health insurance provider, Calvo’s SelectCare, shows that based on the Patient Protection and Affordable Care Act, the government of Guam overpaid health insurance premiums by approximately $12 million. It is a priority of mine to spur competition in the health insurance negotiating process that will drive that cost down and spur competition for this large government contract.

I introduced Bill 435-31 that mandates the government of Guam health insurance negotiating team to negotiate with all health insurance providers submitting a qualified proposal for health insurance coverage for government employees and retirees. This will mandate that competition be rampant in negotiations with all health insurance providers that want a chance at claiming the coveted health insurance contract.

Just last year, the negotiating team, which was made up of Gov. Calvo’s appointees, among other employees of different branches and agencies of the government of Guam, subjected itself to negotiate with only one health insurance carrier, which was Calvo’s SelectCare. This egregious injustice to the taxpayers of Guam illustrates the need to mandate that the negotiating team entertain offers from ALL health insurance providers that submit qualified proposals. The way in which the negotiations took place last year, the negotiating team members ranked qualified proposals, and the highest ranked health insurance provider’s proposal was chosen to negotiate, leaving the other providers on the way side.

The policy in Bill 435-31 is in the best interest of the taxpayers of Guam because it will increase competition between health insurance providers for the government of Guam. As a result of the Patient Protection and Affordable Care Act, the profit and administrative costs a health insurance provider can charge in premiums is limited to approximately 15 percent. With such a cap, there is no reason why competition will be detrimental to the government of Guam’s health insurance negotiations, as the government is protected from any inflated premiums and costs that may arise from any health insurance proposal.

In FY2011, the Calvo’s SelectCare health insurance contract exceeded the 15 percent limit described above and was 15 percent more than the law allowed. That’s more than $12 million the government of Guam and its employees and retirees overpaid to one single vendor! This money is due back to the government and its employees and retirees from Calvo’s SelectCare by August of this year. If you can recall, back in June 2011, Gov. Calvo media blitzed his way through the passage of the Supplemental Budget of FY2011, which basically took the Hay Study pay raises from the employees of the government of Guam to pay for the Calvo’s SelectCare contract. The Hay Study was apparently funded, because those funds were paid to Calvo’s SelectCare. Now the government comes to find out that we actually overpaid $12 million.

In addition to promoting competition, the best aspect of Bill 435-31 is that employees and retirees of the government of Guam may have a chance at being able to select from multiple carriers, if that is what the negotiating team decides. I am requesting that all government employees imagine being able to select care from several different insurance carriers that compete for your business on the principles of providing the best quality plan at the best price. One single carrier has coveted the government of Guam health insurance contract over the past several years and we have all seen the dramatic increase in our health insurance premium rates. I say we covet our money and budget it to where it should go – education, public safety, and public health and welfare for the residents of Guam.

A public hearing will be held on Bill 435-31 tonight at 6 p.m. at the Guam Legislature public hearing room. I encourage all government of Guam employees to voice your support to have more than one insurance carrier take care of your heath needs for you and your family.