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Lt. Gov. questioned huge premium increase

By Therese Hart HAGÅTÑA, Guam (Marianas Variety, Sept. 30, 2010) – Governor Felix P. Camacho signed yesterday in Lake Tahoe, California, the Government of Guam’s $70.4 million health insurance contract with Calvo’s Insurance SelectCare despite Lt. Governor Mike Cruz’s wish that the high premium rates be re-examined.

The newly-signed contract which will take effect on Oct. 1, the start of Fiscal Year 2011, reflects a 40 percent or $20.1 million increase in the combined health insurance premium rates of GovGuam, its employees and retirees.

Camacho said the new contract came after a six-month thorough negotiation that included representatives from the Department of Administration, the Office of the Attorney General, and consultant Aon Insurance.

"My signatures should put to rest the anxieties of the active employees and GovGuam retirees," said Camacho. "The work is still not over as open enrollment has closed and we all must ensure that all those under the program are being served well in the days and year to come."

"The contract is in compliance with the recently signed Patient Protection and Affordable Care Act by President Barack Obama and is for the first time done prior to when contract coverage is scheduled to begin," he added.

The new contract with SelectCare did not bode well the Democratic gubernatorial team of former Governor Carl TC Gutierrez and Senator Frank Aguon Jr.

"In a midnight rush to sign the contract in Lake Tahoe, both the actions of Governor Felix Camacho and Calvo Enterprises have been revealed to be a collusion between big money and big power with our working families as the loser," they said in a statement.

Camacho also signed the FY2010 GovGuam healthcare insurance program contract with SelectCare, which had been sitting at the AGO.

Cruz, who is the acting governor until Camacho returns this Friday, wrote SelectCare Administrator Frank Campillo to ask that he voluntarily disclose medical loss ratios; the medical denial rates; and administrative costs for each of the last three years.In his response letter sent on Tuesday, Campillo did not provide the requested information and instead described the negotiation process and cited certain sections of the Health Insurance Rules and Regulations.

He urged Cruz to meet with the government’s negotiating team to review the data which should "satisfy your concerns over the fairness of both your health insurance bid process and the negotiated rates that resulted from it."

Campillo wrote that the negotiated rates "are fair and equitable" and that employees and retirees received good value for their premium payments.

In a response to Senator Frank Aguon Jr.’s request for a review of the health insurance rates, Insurance Commissioner John Camacho responded by saying that the government’s negotiating team was assisted by actuary Aon Consultants to evaluate the rates, therefore, he will not investigate the negotiating process unless there were allegations of breach in law.

Incumbent Senator Rory Respicio, who is seeking re-election, asked Attorney General John Weisenberger to conduct an investigation on GovGuam’s health care insurance program.

His request stemmed from information that 2009 and 2010 health insurance contracts were not yet signed.

"How is it legally permissible to expend public funds without a signed contract?" he asked.

The senator asked the attorney general if the unsigned previous contracts are void and unenforceable.

"My letter to Attorney General Weisenberger is more of an indictment on the current practices of this administration and its administrators. There are laws in place relative to the executing of contracts, to include the certification that these funds are available, and yet nothing seems to happen when these laws are being circumvented, or in most cases outright ignored," he said.

"We have reviewed this letter with Certified Public Accountant Stan Wilson who also shares the same concern and will submit a similar letter to General Weisenberger," he added.

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