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By Steve Limtiaco

HAGATNA, Guam (Pacific Daily News, May 14) - The government of Guam's contentious relationship with health insurance provider PacifiCare Asia Pacific took a turn for the worse during the past week, after PacifiCare said it will cancel dental and medical insurance for the government's subscribers.

The decision affects about 1,200 GovGuam subscribers and their families - mostly those who have dental coverage under the company.

PacifiCare sent cancellation letters to GovGuam clients after it accused the government of missing a deadline for payment of insurance premiums, said Cecilia Martinez, Department of Administration acting human resources director. The insurance company claims the payment was due five days after the pay period ended, Martinez said, but the government believes it has 15 days to pay.

Deputy Attorney General Joseph Guthrie sent a letter to PacifiCare's attorney yesterday, stating that the government's deadline is 15 days after the pay period. He included a chart in his letter, which showed the government has consistently been paying the premiums for employees about nine days after the pay period.

Guthrie asked PacifiCare to take back its cancellation notice, otherwise "legal action will surely follow."

PacifiCare Plan President Joseph Husslein did not return a call to his office yesterday afternoon.

PacifiCare was paid this week, but it has not reinstated coverage to employees, Martinez said. "What they have told the employees is they will not be covered, even though they received the payments.

"They claim that the payment was due May 6, and because they did not receive it they sent the employees their termination notices May 7. They're saying that upon receipt of their notice for termination, the 31st day after receipt they (employees) will be officially terminated."

Despite the grace period in the company's letter, Martinez said DOA has received one complaint from an employee whose dental insurance already has been declined by her dental clinic.

Attorney General Douglas Moylan yesterday said his office is reviewing the terms of the government's contract.

Moylan said he suspects PacifiCare's cancellation of GovGuam coverage is an attempt by the company to finally end its relationship with GovGuam.

"I'm suspicious of their motive for issuing these notices of termination, because it seems consistent with their wanting to be out of the contract altogether," Moylan said. "That's why we're reviewing it very carefully right now."

PacifiCare last year announced its desire to stop providing coverage to GovGuam employees and retirees, saying it has been losing money on the contract.

But the government brought PacifiCare to court to force it to continue as a provider, arguing that a "continuing clause" in the company's decades-old contract with the government does not allow it to stop.

A judge ordered the company to remain as a provider, but with prices set by an arbitration panel.

The price for PacifiCare medical insurance was set very high -- between $800 and $2,000 a month -- prompting most employees to switch from PacifiCare medical coverage this fiscal year, but about 1,200 employees still subscribe to the PacifiCare dental plan, Martinez said.

The dental plan costs between $39 and $105 per month, according to Pacific Daily News files.

Employees could be left without coverage for months unless the issue is resolved, Martinez said.

"They won't have (insurance) until we have the open enrollment again," she said. Open enrollment typically begins in September, according to Pacific Daily News files, although it has been delayed some years because of disputes with insurance providers.

May 14, 2004

Pacific Daily News: www.guampdn.com

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