By Gaynor Dumat-ol Daleno

HAGATNA, Guam (Pacific Daily News, Sept. 4) - Thousands of government of Guam employees, retirees and their dependents under PacifiCare will have to find alternative health insurance coverage soon.

PacifiCare will no longer offer medical or dental coverage to GovGuam employees or retirees after Sept. 30, according to a PacifiCare announcement yesterday.

More than 5,000 GovGuam employees, retirees and their dependents have PacifiCare medical insurance coverage and about 8,000 of them have PacifiCare dental coverage, according to Patrick Bulaon, PacifiCare's public relations and marketing manager.

Their medical and dental plans will end within a few weeks.

GovGuam and PacifiCare have been unable to agree on new rates for the next fiscal year, which begins next month, prompting the health-care company to demand arbitration.

But from PacifiCare's perspective, arbitration was going nowhere.

"While PacifiCare's request for arbitration was not rejected by GovGuam, it was not seriously considered. GovGuam's reply was that there were no issues to be arbitrated,'' according to a written statement from Joseph Husslein, PacifiCare Asia Pacific president.

PacifiCare's decision leaves thousands of GovGuam employees, retirees and their dependents in a holding pattern, according to Attorney General Douglas Moylan.

PacifiCare is the last health insurance company to provide full medical coverage to GovGuam employees and retirees, Moylan said.

If PacifiCare is out of the picture, it means a higher cost of health care for GovGuam employees and retirees because other health insurance plans require consumers to pay a percentage -- usually about 20 percent -- of the cost of their medical bills, according to Moylan.

Hardest hit will be GovGuam members who require frequent medical attention, according to the attorney general.

Moylan said under local and federal laws, PacifiCare cannot just abruptly drop coverage for GovGuam members. He said lawyers in his office are reviewing recent developments to weigh what action to take.

He said PacifiCare has received the benefit of the patronage of the local government and its employees for years. For PacifiCare to suddenly drop GovGuam members is not fair, according to Moylan.

According to PacifiCare, it offered GovGuam fiscal 2004 rates and benefits that would cover health-care costs based on PacifiCare's experience with GovGuam -- and provide what the company called "a modest 5-percent profit.''

GovGuam rejected the offer, according to PacifiCare.

Husslein said in a written statement that, for the past several years, PacifiCare has offered medical services to GovGuam employees and retirees at rates which resulted in a substantial loss to PacifiCare.

"Between October 1999 and March 2003, PacifiCare lost millions of dollars when providing medical services to GovGuam employees and retirees. In this shrinking health-insurance market, as private businesses strive to remain viable, we would not expect the private sector to have to subsidize any losses from GovGuam,'' according to Husslein.

He said GovGuam employees are encouraged to select another health insurance company during GovGuam's open enrollment or face the possibility of losing their rights to coverage through GovGuam for fiscal 2004.

September 4, 2003

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