| October 21, 2011

OSEEGIB on the right track

The recent news that the Oklahoma State and Education Employees Group Insurance Board (OSEEGIB) is implementing a cost-cutting move that will save taxpayers $9 million annually is refreshing.

OSEEGIB is doing what bureaucrats so often have difficulty doing, which is remembering that they are funded by taxpayer funds. OSSEGIB is following the example of the private sector and pursuing a widely used and effective practice regarding prescription drug contracting. Many fully insured and self-insured plans have long used technology and the mail system to effectively use mail order prescriptions. OSEEGIB, which operates the state’s self-insured, taxpayer-funded health insurance plan for state, education and some local government employees, has rightly decided to join their peers, and they should be applauded for their efforts to reduce costs.

OSEEGIB officials appear to have both fairly and methodically implemented this new plan. The new approach to prescription drug benefits has been discussed and considered for years by OSEEGIB and was finally approved in open meetings this past summer.

Here’s how the new prescription drug benefit will work for government employees using OSEEGIB’s HealthChoice plan (Note: prescriptions covered by Medicare are not affected by this change in policy): Effective January 1, 2012, government employees will be able to obtain routine prescription drugs from their local pharmacy in the exact same manner as prior years. In order for beneficiaries to receive the in-network pricing toward payment of maintenance prescription needs, they will obtain those prescriptions in the restructured Maintenance Network (beneficiaries may fill up to three 30-day maintenance prescriptions before entering the Maintenance Network). The restructured Maintenance Network utilizes a combination of any pharmacy providers and a pharmacy mail order provider who has agreed to a lower contract rate for maintenance prescriptions. This commonly used structure by the private sector, which will now be implemented by OSEEGIB, will save an estimated $9 million in annual taxpayer funds in the cost of the OSEEGIB insurance plan. This new cost reduction was utilized in the determination of OSEEGIB insurance rates for 2012 – which results in no increase in premium costs for OSEEGIB plan members – thus lowering the cost taxpayers have to spend on health benefits for government employees. The decision is a win for taxpayers and a win for state employees because the relevant quality and delivery of benefits will in no way be compromised.

It comes as no surprise that the particular business interests who don’t want to agree to a lower contract price with OSEEGIB (though many of their peer providers have readily agreed to) are complaining and stirring up a ruckus about the new path adopted by OSEEGIB. Their reaction is typical of those who benefit from the excesses of government. Anytime government does the right thing and makes decisions that benefit taxpayers, there will be individuals and businesses that no longer profit from the welfare of state government. The belief that the government’s job is to subsidize the private sector is one reason why total government spending is at record levels for the state of Oklahoma, and the federal government is headed for a historic financial collapse. What is most important to remember is that it is not government’s responsibility to ensure that government expenses exist perpetually or to provide revenue to the local or distant business who directly or indirectly benefit from the operation of a particular government service. Rather, it is the government’s duty to administer its hopefully limited services in a quality manner, at the lowest possible cost and least burden to taxpayers.

Kudos to OSEEGIB and its staff for keeping on the right track, and hopefully all other government entities will follow its example.

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