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Consultant paid $90K for health insurance privatization
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Posted on Feb 10 2005
The Governor’s Office is paying a health insurance consultant some $90,000 to help the NMI Retirement Fund privatize its group health insurance program.
Governor’s senior policy advisor Robert Schwalbach confirmed yesterday that the Executive Branch would pay Hawaii-based consultant Karen Bauder for her work.
“The Governor’s Office contributed that money to make it easier for Group Health and Life Insurance program to make the conversion and to do so with professional assistance,” said Schwalbach.
He said that Bauder, who came on board middle of 2004, is paid on an hourly basis. He said he gets monthly billings from the off-island consultant.
“I’ll check and see whether the amount of work being done matches the amount in the billing,” he said.
So far, Bauder has finished the drafting of Request for Proposal for the privatization late last year. The RFP, which closed on Feb. 1, had only obtained two proposals. The Fund had wanted to award contracts to at least three heath insurance providers to allow members a choice.
“I’m very happy we’ve got two,” said Schwalbach.
He said Bauder is now reviewing the proposals.
“Our ultimate deadline is to make the transition by July 1,” he said.
The Retirement Fund, upon an earlier recommendation by Gov. Juan N. Babauta, decided to convert its existing group health insurance program—now under a third party administrator—into a privatized program.
The Fund initially moved to terminate its third party administrator contract with Hawaii Pacific Medical Referral upon its expiration in July 2004. But due to lack of readiness to go into privatization, the Fund ended up extending HPMR’s contract three times, the latest of which would be up to end of May this year.
Schwalbach justified that a privatized program would be better for insurance members.
While critics believe that it would drive up the cost and create uncertainly for members, he said, “ just the opposite is the case.”
“There have been times when people were unsure if they can get the services they need when they’re sick. What we’re trying to do is to make sure that we have an insurance system that really provides services to government employees,” he said.
