By Gaynor Dumat-ol Daleno

HAGATNA, Guam (Pacific Daily News, Oct. 17) - The estimated 16,000 people covered by medical and dental insurance under a government of Guam contract with PacifiCare may want to consider a backup plan.

GovGuam attorneys fought at a court hearing yesterday afternoon to try to force PacifiCare to keep its GovGuam contract.

But PacifiCare representatives said yesterday that doing business with the local government has meant financial losses that will drive the health insurance company out of the island if GovGuam-related losses continue.

PacifiCare Asia Pacific loses $400,000 a month as a result of continued health-insurance coverage to government of Guam members at current rates, Todd Thompson, a PacifiCare attorney, said yesterday. The company also stands to lose $5 million in one year if forced to continue coverage to GovGuam members at current rates, according to Thompson. The losses stem in part from the high concentration of GovGuam retirees covered by PacifiCare.

"In six months to a year, PacifiCare will be in serious jeopardy. If PacifiCare goes broke, it's irrelevant what the court order is," Thompson said.

Superior Court Judge Joaquin Manibusan Jr. heard back-and-forth arguments for more than three hours, between PacifiCare and the attorney general's office on, among other things, whether to set aside an arbitration panel's recent ruling, which favored PacifiCare. The panel ruled earlier this month that PacifiCare is under no obligation to continue providing health insurance coverage to GovGuam members.

Manibusan said his decision may be issued Monday.

Whatever that decision may be, Manibusan said it will not be an easy one for him to make.

"At this point, I am right in the middle," he said. "This might be the most difficult issue I've ever been asked to decide in all my years with the bench."

Manibusan's dilemma stems in part from his previously stated concern that if PacifiCare stops providing health insurance to GovGuam members, the health safety net for thousands of people, including many seniors, will be in jeopardy.

About 5,000 GovGuam subscribers have medical insurance coverage and 8,000 more GovGuam subscribers have dental insurance coverage, PacifiCare has stated. With the GovGuam subscribers' dependents factored in, about 16,000 people will be affected by the outcome of the PacifiCare-GovGuam dispute, according to a GovGuam estimate.

And nearly half of GovGuam retirees who have health insurance are covered by PacifiCare, according to a GovGuam statement at yesterday's hearing.

Thompson said that although PacifiCare will no longer provide health insurance coverage, GovGuam members can still use PacifiCare's health center.

But, the judge asked, who would cover costs?

Thompson said GovGuam subscribers will have to sign up with other health insurance plans.

Attorney General Douglas Moylan is leading the government's fight to keep PacifiCare health insurance for GovGuam subscribers because PacifiCare is the last to provide GovGuam subscribers with 100-percent coverage of covered medical bills.

Moylan reiterated in court yesterday that PacifiCare had benefited from almost a decade of doing business with GovGuam, so PacifiCare cannot just abruptly exit from its GovGuam contract.

The two other health insurance carriers available to GovGuam employees and retirees require a deductible, which is about 20 percent of covered medical costs. For a $3,000 hospital bill at Guam Memorial Hospital, for example, that deductible equates to a $600 out-of-pocket cost for a patient's family.

GovGuam and PacifiCare ended up in court in September and before an arbitration panel earlier this month after the two sides failed to agree on how much higher health insurance premiums should increase for this fiscal year.

PacifiCare had announced a plan to stop providing health insurance to GovGuam members beginning Sept. 30, but GovGuam obtained a temporary restraining order from Manibusan. The order remains in effect until the judge's ruling.

PacifiCare has stated it wanted an increase in GovGuam's insurance premium that would allow the company a five-percent profit. But another PacifiCare attorney, David Mair, said the company crunched its numbers again and found out there's no GovGuam rate that will result in a five-percent profit for PacifiCare.

October 17, 2003

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