State and school employee health programs would adopt cost controls

Each program’s plan design committee would develop new health plan options that meet affordability standards. The requirements would cover the State Health Benefits Program and the School Employees’ Health Benefits Program. Standards would include reasonable limits on patients’ costs and the share of costs plans cover, plus coverage for preventive care and ongoing illnesses. Before major changes, committees would consult union representatives and publish an analysis of effects on hiring and keeping employees. The requirements would take effect 180 days after enactment.

Both programs’ commissions would require payment controls, cost reporting, and enforceable performance standards for outside plan administrators. Administrators would report annually. Commissions would publish cost information and report to the governor and Legislature. Each legislative chamber would hold annual hearings. Payment limits tied to Medicare rates would start as a pilot for selected services or areas. Where appropriate, drug benefit managers would face rules for passing through prices, disclosing rebates, allowing audits, and acting in the program’s financial interest. Claims analysis would follow federal health privacy rules. The requirements would take effect 180 days after enactment. Both commissions would develop administrator requirements within 180 days of that effective date.

Both programs would limit future contracts with outside plan administrators to four years. The limit would cover outside companies administering the State Health Benefits Program and the School Employees’ Health Benefits Program. At the end of a four-year contract, renewal or renegotiation would require competitive bidding. The act would take effect 180 days after enactment. The contract limit would apply once contracts in place on that effective date end.