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Friday, April 25, 2014

Admin eyes extending Aetna contract for 30 days

With less than two weeks before the Dec. 31 end of Aetna’s contract with the government for health insurance and with still no deal reached with either of two other vendors, the Inos administration is weighing at least a 30-day contract extension with Aetna, among other things.

“The government is hoping that final resolution can be reached soon. Yes, an extension for at least 30 days is one contingency option at this point,” press secretary Angel Demapan said yesterday.

Aetna did not bid on the latest request for proposals for government health insurance coverage; only StayWell and Pacifica Insurance did.

Health insurance premiums for government employees and retirees could go up by 30 percent to 45 percent as early as Jan. 1, 2014, unless the government finds innovative ways to keep the costs low.

One estimate for healthcare benefits, for example, would increase premiums by 43 percent, which would increase total annual costs from approximately $18 million to $25 million. Implementation of some provisions of the Affordable Care Act or Obamacare on health insurance premiums in the CNMI is also a source of concern for the government.

Half of the annual cost is paid by the employer/government and the remaining $9 million is by government employees and retirees. Of the $9 million that the government pays, about $7 million is for retirees and some $2 million is for active employees.

A 30 percent to 45 percent hike in insurance premium is just one of the many challenges that the government faces, besides its financial obligations to the Settlement Fund and the Retirement Fund.

Demapan said the governor has not gone into specifics of any austerity measures being considered at this time. So there is no telling whether it would be another eight-hour or 16-hour work cuts per pay period, unpaid holidays or something else.

“He has cautioned department heads to manage their finances conservatively in the event that projected revenues come up short,” the press secretary added.

The House and Senate also continue to push for revenue-generating bills, including the recently signed electronic gaming and video lottery measures.

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