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GovGuam owed as much as $18 million

By Oyaol Ngirairikl

HAGÅTÑA, Guam (Pacific Daily News, April 20, 2012) – A rebate of $18 million for the government's health insurance program could be used to help offset the $43 million in spending cuts.

Vice Speaker Benjamin J.F. Cruz said the government of Guam and its employees enrolled in the government's health insurance program may be owed up to $18 million in rebates.

"That money could be found in the rebates owed by our health insurance provider in accordance with the Patient Care and Affordable Care Act (PPACA)," Cruz wrote.

That is what Cruz told Gov. Eddie Calvo in a letter Friday, according to a news release.

The governor recently created a task force whose job is to put together a cost-cutting plan -- that will include layoffs and possibly an early retirement program -- that would cut millions of dollars in government spending.

The federal law requires insurance companies to provide a certain level of value in medical benefits for each premium dollar spent on the insurance plan, the news release stated. If that level is not met, the difference must be paid back to the subscribers in the form of a rebate. Cruz believes the rebates are due in August, based on federal rules.

According to Office of Public Accountability Report No. 11-11 published last December, through Fiscal Year 2011, GovGuam and its employees paid $77.6 million in premiums to its insurance carrier. According to the carrier's reporting, it paid out about $48 million in actual claims. While this figure still must be reconciled, that equates to a medical loss ratio of approximately 62 percent.

The federal medical loss ratio requirement for GovGuam's plan is 85 percent, which would have required a value in medical benefits for premium dollar of $66 million. Thus, the government and its subscribers may be entitled to rebates totaling $18 million, the news release stated.

The total percentage, however, could fall short of 85 percent. The federal government allows for credibility adjustments that take into account different types of plans and circumstances that could decrease the percentage amount of the rebate, according to Pacific Daily News files.

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