US Public Health Insurance Plan Dissected

January 25th, 2011
US Public Health Insurance Plan Dissected

A health insurance plan for the State of Utah civil servants may be under threat. An audit has found that the costs of running the plan have escalated, and not enough is being done to keep costs down.

The last audit carried out in 2003 found that the Utah Public Employee Health Plan (PEHP), which is a non-profit making scheme, spent $34 per person more than the State’s 5 major private insurance providers. The money was spent on pharmacy and medical bills. But since then costs have escalated by 114%.

Although for many, these statistics will be shocking, the audit’s supervisor, Wayne Kidd did say that he felt that much of the problem was out of the PEHP’s control. He suggested that many of the public employees in the region suffered from chronic heart conditions. He also confirmed that much of the spending was on hospital bills for Utah staff, spending far more than the private sector.

Whether the PEHP will be told to cut costs is not clear but Mr. Kidd does say: “PEHP is not aggressively negotiating contract rates.”

The director of PEHP, Jeffrey L. Jensen responding to the audit report said: “they’ve increased certain hospital discounts by 33 percent for 2011. Also, a preferred-drug list that steers employees to lower-priced medicines saved taxpayers $9.9 million in 2009.”

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