|University of Minnesota Health Plan Task Force
||January 14, 1998
The Task Force on Health Insurance of the Faculty Consultative Committee
at the University of Minnesota commissioned this report to investigate
alternative health insurance purchasing strategies to the current partnership
with the State of Minnesota. This report addresses a variety of models
for the committee to consider and also reports on health insurance options
that other organizations provide for their employees. The other organizations
include Macalaster College, the University of Wisconsin, Penn State University,
Medtronic, Toro, and the City of St. Paul. Three member companies of the
Buyers Health Care Action Group are discussed briefly. Retiree benefits
for several Big Ten Universities are also discussed.
There are a variety of models which are considered in this report. The
main options are as follows:
- Adoption of the BHCAG model - this option would be for the University
to join BHCAG with the state to supply health insurance to their employees.
This option should reduce costs, but will also decrease choice and has
- Addition of the BHCAG model to conventional plans - this option
would allow the University to join BHCAG and also offer other conventional
plans. This option would allow for more choice, but will not offer as much
cost reduction and it has insurance risk.
- Independent adoption of BHCAG model with the State - this option
allows the University and the state to directly contract with care systems
to provide health care for their employees. This option has possible cost
reduction benefits, yet increases insurance risk.
- Adoption of BHCAG model without State and BHCAG - this option
would allow the University to directly contract with care systems to provide
health care for its employees. The pool of employees would be smaller and
thus the bargaining power less and the insurance risk increased.
- Total replacement - this option involves obtaining health insurance
from only one health plan. The cost should be reduced by placing all employees
in one plan, yet the choice for employees would be dramatically reduced.
- Remain in current partnership with the state - this plan would
maintain the status quo in how health insurance is offered to employees
of the University.
- Remain in current system without the state - this plan would
offer the University the option to negotiate with insurance plans and choose
plans which better meet the needs of the employees of the University. The
costs might increase with a smaller pool of employees, but choice would
be better fitted to University employees.
- Medical Savings Account - this plan allows the employees access
to a flexible spending account which they use to choose their health insurance.
This offers the employees more control over the insurance options they
purchase, but it may lead to negative effects on employee purchasing decisions
and employee health.