State officials are working toward a contract for a new health insurance provider for 14,000 state government employees and their families. This comes after Blue Cross Blue Shield missed a November deadline to keep insuring the state.
Right now, about 80 percent of state employees receive their health insurance through Blue Cross Blue Shield of Montana. With employee families it adds up to 33,000 Montanans under this insurance.
“They have been our primary contractor for many many years,” said State Department of Administration Deputy Director Sheryl Olson. Almost 30 years.
But that will not be the case in 2013. The current contract with Blue Cross is running out at the end of the year for all state employees except for those working with the Montana University System. The state asked for new proposals from insurance companies–placing the deadline for these proposals at 2 PM on November 18th. Blue Cross was late getting theirs in–by 3 minutes.
“We all procrastinate too long, we wait too long to get proposals in,” Olson said. She called it a painful situation but said it’s standard procedure to disqualify a late submission. She said this kind of thing happens about once a year with big contracts. The department can’t even open a proposal that missed the deadline.”
“It is an unfortunate mistake not only for Blue Cross but the state of Montana and its employees,” said Blue Cross Senior Government Relations Director Frank Cote. He said an investigation finds multiple reasons contributing to the report’s late submission.
“We’re putting the appropriate measures in place to make sure this doesn’t happen again,” he said.
Several insurance companies did meet the November deadline. Olson said the best general health proposal comes from insurance giant Cigna. Delta Dental stands as the highest scoring dental provider. The state has written evaluations and conducted interviews with these companies. Olson hopes the state can make site visits sometime next week. If these go well officials will start working on a 3 year contract worth about $14 million dollars total. She said the state will see a higher workload over the next year preparing the transition.
“But we’re also hoping for a very good product as well so we think it’s going to be worth the work,” Olson said.
Frank Cote with Blue Cross would not give details as to the content of his company’s late proposal. But he said he has seen the Cigna bid.
“Over the course of three years just from the administrative cost standpoint, the state will be paying millions of dollars more than they’re currently paying,” he said. Again, there is no way to verify that because the Blue Cross bid was never opened.
Cote said it’s too early to tell how losing the state contract will affect the company. But he said it should not affect prices for continuing Blue Cross Blue Shield members.