ALC-State Insurance Programs Oversight Subcommittee
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- October 5, 2026
Representative Robin Lundstrum
Unverified
1:00
Ladies and gentlemen, that clock is not correct. If you'll look at your phones, it's 10 o'clock.
If you need just a minute to get to your seats and finish up your conversations,
let's start here in just a minute. call this to order. We have first on your review to B. Grant, if you, or Mr. Wallace,
if you could come down front and go through all these with us. We're going to exhibit B, 1 and through 4. We'll start with, if you could introduce yourself for the record and
Speaker 8
2:31
start with review of EBD contract. Good morning, Grant Wallace, director of the Employee Benefits Division and Office of Property Risk. Item B1 is a contract for the Employee Benefits Division. This would be our
consultant and actuarial contract. This is a new vendor that we will be working with, public consulting group the initial contract period is for two years for a value
Speaker 10
2:55
of 1.39 million the total projected cost for the full seven years is 4.8 million be glad to answer any questions i'll start that was put
Representative Robin Lundstrum
Unverified
3:07
out on a um rfp yes ma'am yes and this was the one that won that contract
yes ma'am all right any other questions see senator
Senator Jimmy Hickey, Jr
Unverified
3:24
hickey thank you madam chair uh mr wallace just a couple of questions on the rfp that you did
how many how many people applied and how many
Speaker 10
3:34
of them actually qualified out of that so um there were none of them were disqualified and i
Speaker 8
3:40
think it was five or six total that we uh interviewed and and we're not interviewed, I'm sorry, went through that scoring process.
Senator Jimmy Hickey, Jr
Unverified
3:47
Okay. And as far as the price for this, was this highest, mid-range, low? Where were we at with that? What percent did we use on the actual revenue or on the pricing part? Yeah, 30%
Speaker 10
4:01
was the standard 70-30. This was the low cost. Okay. So this
Senator Jimmy Hickey, Jr
Unverified
4:06
was, although you used the 70-30, this was actually the low bid on
Speaker 10
4:11
the thing. Okay. And they were the higher
Senator Jimmy Hickey, Jr
Unverified
4:15
technical as well. Okay, great. Now, is this a brand-new type entity that we're using,
Speaker 28
4:20
or have we been doing this in the past? You've been using
Speaker 10
4:25
another vendor? Right. It was another vendor that was doing the service underneath our Health Advantage contract. We separated that out, and this is a new vendor that we would be working with.
Senator Jimmy Hickey, Jr
Unverified
4:33
Okay. And not to put you on the spot here or anything, but do you remember as far as the cost that we were paying with the old vendor, Was there an increase in this cost? Because I'm going to have some questions in a minute about this report that we have about expenses. Yeah.
Speaker 10
4:51
So here's the tricky part. You know, it's kind of an hourly rate. I don't want to say that it's within the realm. There was not a huge increase, but I don't want to say that there's a huge decrease with this new provider either. So they were pretty kind of in line with what we have been spending. Okay. All right. Okay, well, I'll talk about
Senator Jimmy Hickey, Jr
Unverified
5:13
those expenses here in a minute. All right, thank
Representative Robin Lundstrum
Unverified
5:18
you, sir. All right, you're very welcome. Representative Eades, did you get your question answered?
Yes. Okay. Who is number three? Okay,
you're good. All right, any other questions? Senator Hickey, do you want to jump back in on this one? My next question is going to
Senator Jimmy Hickey, Jr
Unverified
5:37
be on the report. Is that what we're going to? Well, it may not be my next question because I also have
one on B4 and then also C. Okay, let's stick to B1 right now. All right, that's it. Anybody else? All right.
Representative Robin Lundstrum
Unverified
5:52
I need a motion to move as reviewed. Representative Beck and Senator Boyd, it was a second. All in favor, aye. Aye. All opposed? Motion passes. It's reviewed. B2. Okay, these
Speaker 8
6:08
are our formularies. These will be for the quarter, so September, October, and November. We'll start with the September formulary
Speaker 10
6:17
recommendations. I will say as a general statement, the bulk of what is going on in all three months
are we're seeing some price reductions in medications, so we are reducing the tiering as well to kind
Speaker 8
6:33
of keep in line with that. Ones that I would point out in September, you'll see in the September report on line 6, 7, and 8, that designation of NC3P. Just want to kind of define that a little bit. This is making sure that on the pharmacy
Speaker 10
6:52
benefit, these will not be covered because this is a medical benefit,
and we want to make sure that we run it through the medical
Speaker 8
7:03
benefit and not on the pharmacy benefit. You don't want that dual running there. um you'll also see some moves to generic um medication preferring over the the generic over the brand um the let's see that's probably that's all on page one for september so i'll pause there to see if there are any questions for the september formulary recommendation members
Representative Robin Lundstrum
Unverified
7:32
okay i had a question on this whole report there were a number of ones that were one was 51,000 for a month and then one was 49,000 per injection that was on page two line nine page two line five
Speaker 8
8:01
yes so those we are recommending those are new to market medications
and we are recommending not to cover those at this point as we
Speaker 10
8:09
do further evaluation on the efficacy and cost evaluation okay all right
Representative Robin Lundstrum
Unverified
8:17
thank you any other members all right um do we have a motion to approve exhibit b2 okay so moved and let's go to the next oh excuse me uh i need a second got a second thank you representative collins and all in favor opposed motion passes
let's look at exhibit b3 which is your oh i'm sorry you're still on b october
Speaker 8
8:53
sorry so going to the october uh the only one that i would want to highlight in october would be on page 2 lines 16 through 20 these are your glp ones we are adding um a new coverage or indication the mash nash conditions we have found
Speaker 10
9:14
that it is more cost effective
to use a glp1 to treat these conditions as opposed to the normal treatment options
Speaker 8
9:26
that are currently available so we will be recommending adding the glp1s for the mash nash conditions there is a movement of removing some biosimilars because we're going to that lower cost biosimilar option and outside of that it really is again looking for just lower cost and matching
Speaker 10
9:57
up the tiering or dose consolidation making sure you're you know you're doing the correct pricing on the dosage and we're getting the most cost-effective treatment there be glad
Representative Robin Lundstrum
Unverified
10:12
to answer any questions no one's lighting
Speaker 8
10:17
it up go ahead and go to november all right november medical there are again moving to generic preferreds there are some pediatric dosage that we are adding on for some of these medications price reductions um outside of that nothing i probably would
Representative Robin Lundstrum
Unverified
10:37
highlight specifically be glad to answer any questions no one's lighting up
the board so i think we're good with this one all right we need a motion for october and november we got a second from representative boyd motion from who was that over there denise
Speaker 8
11:09
gardner all in favor opposed motion passes all right okay the medical recommendations again
just a reminder these are drugs that are administered in a clinical setting when you see ebrxpa that ebrx reviews the prior authorization for that to determine approval or denial the exclusion would be that we are not adding them for coverage at this time and we do have some vaccines this is just updating
Speaker 10
11:37
for the current vaccine year i'd be glad to answer any questions
Representative Robin Lundstrum
Unverified
11:43
looks like today's your lucky day um members without seeing any questions do we have a motion to review is
accept as reviewed motion to approve we have one representative back senator boyd all in favor opposed motion passes
Speaker 10
12:10
okay all right now we will switch the hat over to the office of property risk item b4 is the investment policy for the state captive insurance program
this policy was a joint effort between stevens capital the treasurer's office the department of finance and administration
Speaker 8
12:28
and myself and we have we are going in a very conservative kind of initial start. Uh, the plan is to review this annually. Um, and we are adhering to state law and investment rules that we're able to do, um, under current state law. Be glad to answer any
Speaker 61
12:51
questions. Senator Boyd. Thank you, Madam chair. So if you'll just give me a little bit of leeway,
Senator Justin Boyd
Unverified
13:01
i'd appreciate appreciate it and um so mr wallace we we've clearly we're moving down this road of the captive um this is opposite of the way we went in health care where we said hey the state isn't doing a good job so we're gonna you know farm that out to the private companies so have you taken a look and gone hey maybe we need to bring that back in have you looked at the state being
its own pbm again what what kind of ongoing evaluation are you doing
Speaker 10
13:28
on that you know i think there's a new phenomenon that you are looking at states investigating captive programs for their health insurance. I don't know that there's enough information out there or enough kind of runway to see the impact of making that kind of change. I do know in the PBM space it would be very challenging for us as our own program to negotiate drug pricing with these huge manufacturers and be able to leverage um our our small pool we are a big program in the state but overall in in the
global market we are a very small uh entity and to be able to negotiate drug pricing with these manufacturers or rebates and those things
Speaker 48
14:06
i don't know that we have the capacity to do that at this point so we weren't doing
Speaker 10
14:12
that before no okay we've always had a tpa a pbm that we were working with to do the drug pro to manage the drug program we'll follow
Senator Justin Boyd
Unverified
14:20
up offline i'm not sure that we understand completely but i appreciate that you're giving it some ongoing thought yes thank you yes
Representative Dwight Tosh
Unverified
14:31
sir representative tosh thank you madam chair grant it's it's my understanding and and appreciate if
you would kind of address this that some of the schools that uh with this captive insurance it's It's my understanding that their premiums are, you know, let me back up. Their deductibles have gone from $5,000 to, I've heard, up to $50,000, and this was supposed to be a cost-saving plan that, you know, was put into place. It's my understanding that they're not seeing a lot of change in the premiums. So I don't know how factual that information is,
but I thought it would be a good opportunity to give you an opportunity to address that if those deductibles are actually making that huge of an increase and if we're not seeing a change in the premiums, what have we gained? Yes, sir. I think Representative Wardlaw might have something. Yes, I'm
Speaker 8
15:28
going to call on him next. I was going to
Representative Robin Lundstrum
Unverified
15:31
let you finish, and then I would like for Representative Wardlaw to weigh in, unless you want to reverse
it. Representative Wardlaw, do you have something you want to add to the conversation?
Representative Jeff Wardlaw
Unverified
15:42
so i can answer most of that question um if you go back to when i presented a bill on the floor i answered most of that question that day yes the premiums didn't change a whole lot even though the the value per thousand did go down but the reason you didn't see a huge decrease in premium was because the values of those insurance properties were under injured prior to the new plan so yes those premiums stayed about the same to answer the deductible question absolutely all the
deductibles went up they had to because they had to become real world deductibles and they were not real world deductibles prior to now one of the reasons we were in the shape we were in was similar to the EBD situation almost 10 years ago was because we had allowed these fantasy deductibles to exist so long that no one would insure us and that's why we were having to put in those subsidies that we put in for two years to get us to this point so yes schools are seeing
higher deductibles and yes schools are not seeing a huge decrease in their premiums some schools actually saw an increase in premiums but their increase was due to the lack of coverage they had to match the number of buildings and the value of those buildings they had. So we are going to hear some of those complaints as legislators going forward, but we have to be able to talk to our superintendents to inform them why they're seeing what they're seeing and what that's going to mean for them going down the road because the long-term part of this is they won't see a huge increase going down the road.
They will start seeing a level out, if not a decrease, But they will see more deductibles, and some will see more premiums depending on how their insured value was measured prior. Representative Tosh, did that answer your question,
Representative Robin Lundstrum
Unverified
17:38
or do you have a follow-up? No, I really don't have
Representative Dwight Tosh
Unverified
17:44
a follow-up. I'm not going to say it answered my question, but it was well explained. But I'm not sure that I totally understand how we can have a captive program
and the premiums are not going down and the deductibles are going up and somehow that benefits our school. So I'll just, I'll continue to look at this but I appreciate the attempt to answer the question. Thank you. Thank
Representative Robin Lundstrum
Unverified
18:10
you, Representative Tosh. Representative Kavanaugh. Thank you. I
Representative Frances Cavenaugh
Unverified
18:15
just have a question that kind of, I noticed. Why does this say that it's adopted by the State of Arkansas Bureau of Legislative Research?
Speaker 10
18:24
BLR is not going to sign this. No, I apologize. Thank you for catching that. That should have been a typo
Speaker 8
18:32
that was corrected. It should be moved over to the State Board of Finance. So thank you for catching that. We do need to correct that.
Senator Jonathan Dismang
Unverified
18:49
Senator Dishmane. Thank you, Madam Chair. And I'd like to elaborate a little bit for the representative about why we're where we are.
On a captive the program as it was was failing and it was failing our school districts And we were just a matter of short time before we were going to have to supplement Additional tens of millions of dollars from the state to be able to keep the program afloat And so the status quo was not working was not going to work in would have essentially undermined itself over a very short period of time and so that is the change to the captive and the one thing that I would say is Go talk to anyone in the private market about what's been happening to the deductibles to be able to maintain insurance.
A multi, if not $100 million facility that was campus-wide, even with multiple locations, should not have a $5,000 deductible. When we're allowing $5,000 deductibles, we are essentially paying for insurance in the most expensive way because we're utilizing it for maintenance, not catastrophic events or major events. And I think that's what you're really hearing is there's frustration because you're no longer able to use the program for maintenance projects, essentially putting on a new roof because it was time to put on a new roof, maybe not so much as coincided with the hailstorm that just came through.
And the other thing that I would say, if you look at the program, and one of the things, and if we're going to keep talking about deductibles, then we also have to talk about the inequality that was happening. Some of our largest districts in the state had $5,000 deductibles, campus-wide, multiple locations, and some of our smallest districts in the state had $50,000 deductibles. So just to make sure everyone understands what that means, that means some of our smallest districts in the state we're subsidizing the rates for some of the largest districts in the state and this resets
that balance based on actual values as if you were in the real market again talk to anybody that's got commercial property or even your homeowners across the state you're not being able to utilize insurance for maintenance anymore because it just is too it wreaks too much havoc on the system and then you're also having to have more realistic deductibles so that you are making yourself make the decision is it worth pursuing this new roof is there that much damage
or do i not file the claim and and again that's what's happening in the real world that's what we're all doing there is nobody walking around that's got a hundred million dollar property with a five thousand
Representative Robin Lundstrum
Unverified
21:32
dollar deductible no one thank you senator dishman good explanation um
Speaker 81
21:38
senator hickey yes ma'am mine's back to the uh
Senator Jimmy Hickey, Jr
Unverified
21:41
actually policy statement here and grant i don't i just if you just ask this question of stevens or whoever's doing it and lord knows i i will say
that they know a lot more about this than me but i see that one of the eligible investments here is going to be a clo a collateralized loan obligation that they're able to buy those in pools and they Senator Hickey, could you tell us where you are? I'm sorry, I'm on B4, and I'm kind of doing a combination of what's under 5. If you look under 5, under eligible investments, it says that they're able to invest in collateralized loan obligations. And it says that it's going to be, everything here is investment grade.
Of course, if you go over to number 7, it shows that that has to be A or better. So I'm assuming that that's all great, super, that's a good policy. My only question is, and again, just maybe to make sure, since they're able to do these collateralized loan obligations, I see that under a restricted or prohibited investment, of course, would be a commodity or commodity contracts, which I 100% agree with. We don't need to be speculating in those. But by doing that, I don't guess there would ever be a need
that they would need to use that as a hedge against one of these CLOs. And I was making sure that we weren't prohibiting something that could actually be something that they would
Speaker 8
23:11
need. Right. So we removed the hedging language because we weren't mature enough to go there yet. So to get
Speaker 10
23:19
to your point, I think when we look at this next year, The CLOs are not something we're going to dip into immediately,
but as we get into year two, we probably will need to restructure to make sure
Speaker 84
23:34
we've got an appropriate balance on that. Okay. So although we're listing
Senator Jimmy Hickey, Jr
Unverified
23:39
it in this policy right now as an eligible investment, we're not planning on going down that route?
Okay. Then that answers my question. Thank you,
Representative Andrew Collins
Unverified
23:54
sir. Representative Collins. Thank you. Over there on page 3, number 10, it says investment performance will be measured net of fees.
Speaker 10
24:02
What are the fees? So this was a flat-line agreement that BLR had negotiated during this transition. So for the first year, it's $450,000. And is that
Representative Andrew Collins
Unverified
24:16
projected to go up? Do we know what it's going to be
Speaker 23
24:20
the next year? There is some, it's a one-year contract, but there were, if it were
Speaker 10
24:26
to extend, increases in the out years. But we do have that kind of stop to be able to renegotiate that in the out years.
Representative Andrew Collins
Unverified
24:35
I could probably get this somewhere else, but what amount are we talking
Speaker 10
24:40
about basically here? Roughly, we're looking at initially $50 million, $5 million, but that's going to vary as we kind of see the operational run of this program, what excess do we truly have? I would expect that that number would increase. But again, we need to see how this behaves over the first year. Yes, the state is capped at $50 million worth of loss, but we need to make sure that we've got the appropriate revenue streams
and appropriate reserves in operating capital before we start going into some more of the longer-term investment aspects that this particular section of the portfolio would manage. okay and so and
Representative Andrew Collins
Unverified
25:19
double check me if i'm wrong but that's roughly a little less than one percent is that what we're talking about probably okay okay thanks
Representative Robin Lundstrum
Unverified
25:32
thank you representative collins anyone else all right i think everybody's got their questions answered um motion to review with correction to change blr to state um board of finance on the signature page do i have a motion
to approve is reviewed so moved Senator Boyd seconded representative Beck all in favor opposed motion passes all right let's go to exhibit C okay if you'll give us just a quick overview
Speaker 8
26:12
so this was our special report from legislative
audit the only finding had to deal with re the recording of expenses from one fiscal year to the next be glad to answer any questions would you go over the slide on
Speaker 93
26:33
page 5 where it talks about the increase in the
Representative Robin Lundstrum
Unverified
26:37
premium and then the where we are on claims because from what I see it's 360 million for the
premium 320 for the claims but we had 21 million that was part of COVID American Rescue Plan so that only is this 19 million in buffer is that correct or am I reading that wrong I'm sorry page
Speaker 8
27:03
seven so yes our revenue if If you're page seven, sorry. I'm sorry.
Representative Robin Lundstrum
Unverified
27:08
On mine, it's page five, exhibit five. Okay. Jimmy.
Exhibit C. Am I looking at the wrong
Speaker 98
27:21
thing here? Exhibit C. Exhibit C. Page. Which one?
Representative Robin Lundstrum
Unverified
27:30
This one. Page five, exhibit five. Hickey. okay
Speaker 8
27:38
so we're looking at the state employee side so oh okay i'm looking
Representative Robin Lundstrum
Unverified
27:47
at public schools i'm sorry not state
Speaker 8
27:49
it's going to be on we're going to page seven okay on page seven uh yes so we are seeing a decrease in the revenue uh
Speaker 10
28:06
on for the public school side This was a result mainly of the reduction in the district match from 300 to 234.50. We have since corrected that in the last session.
That was now brought back in line. But yes, for
Speaker 8
28:24
this year, we are looking at, and for this report, It was balanced a little bit of a decrease in revenue over expenses. And we are currently operating at
Speaker 10
28:35
a deficit, but we do have healthy reserves to get us through this year. And I am working with the Department of Education for this year to figure out ways to make sure that we minimize that deficit and the draw on the trust fund.
Representative Robin Lundstrum
Unverified
28:55
Okay. All right. That's helpful. Thank you. Other questions? Senator
Senator Jimmy Hickey, Jr
Unverified
29:00
Hickey? So just along those lines, and, of course, I see that this report actually ends for June 30th of 2024. So you all have done your analysis since
Speaker 84
29:11
then, and I heard you say we're still operating at a deficit? Right. So for the
Speaker 10
29:18
plan year 2025, we started in January. Yes, sir. We are projected to operate at a deficit for this year,
which was expected knowing that the decrease in the district match. We have corrected that for 2026, for plan year 2026, and using plan year 2026 as our reset to then know what we need to do for plan year 2027 to start being more transparent in our rate setting, to be able to tag it to medical CPI, some known, very transparent, and very predictable path,
so that when we come to you all and say, we need the state to contribute, this is the employer, we need to have the employees do this for their monthly premiums, that it's not necessarily some made-up number, but it is targeted and very transparent and very predictable.
Senator Jimmy Hickey, Jr
Unverified
30:15
And if you know, fine, from January at the start of this calendar year until now, how much of
a deficit have we – what's our accumulated total up to whatever you've got it to?
Speaker 10
30:29
Right now I want to say that it's $30 million
Speaker 23
30:32
to $40 million on the public school side is what we're looking at ending the year with. And we're still
Senator Jimmy Hickey, Jr
Unverified
30:39
positive, of course, on the state employee side? Correct. Okay. All right. And
what do you think is going to correct that when
Speaker 10
30:49
you said legislation? Right. So during this past legislative session, they increased the district match.
Senator Jimmy Hickey, Jr
Unverified
30:55
Okay. But you all are keeping a running total of this month by month?
Yes, sir. Okay. I wouldn't mind, Madam Chair, if we could have that included into this report. I mean, I just think that that would be the responsibility of this committee. Since we do know that it was running at this deficit or whatever, I'd like to continue to watch that trend and let's just see what it starts doing because we need to
Speaker 23
31:20
know also. Right. I've generally included that as kind of background information. I probably
Speaker 10
31:25
just brain fart forgot to do it on this one. But, yes, I'll make sure you get that.
Speaker 6
31:31
Okay. That would be good. Thank you. Thank you
Senator Jimmy Hickey, Jr
Unverified
31:35
for that suggestion. And I do have some questions about participation in this. I don't know if now is the right
Representative Robin Lundstrum
Unverified
31:42
time or if you want to go to
Senator Jimmy Hickey, Jr
Unverified
31:44
someone else. No, let's go ahead and do that, and then we'll go to Representative Wardlaw. Okay. So on the participation side, do
Speaker 10
31:53
you know where we're at as far as on the school employee side, on the MAPD? Well, yeah. On the MAPD side for the public schools, it's probably still in the high 50s.
I think we're seeing a little bit of an uptick. It's not nearly where the state side. The state side is still in that higher 60% participation. But I will say, as we've done the open enrollment this year, we are seeing more positive feedback and more interest from the public school side in participating in that program. Okay. My
Senator Jimmy Hickey, Jr
Unverified
32:23
question is, you know, and I think that there's a savings. I've never understood why
people are not signing up for that. I guess that's just beyond me. Of course, you know, we've given them that choice.
But, of course, it looks like to me it's such a huge saving for the employee and then I guess also for the state. So should we look at trying to give some examples? Should we show what those premium costs are going to be lower if they're doing this and try to market this through some type of organizations that will help us get it out to that community? because again I understand that maybe maybe there was some worry about you know who the providers
were going to be I don't know that that's still a case and it like I say I don't I know we're showing this deficit on this side I just think that you know possibly we need to try to do some more outreach to try to
Speaker 10
33:23
push this. So thank you for asking that because if I can expound a little bit and kind of open up the curtain a little bit on this um this has been a huge headwind that we battled since i took office and um and it's one of those that there's a lot of misinformation
and the public school retirees are a very close network as we all can respect i've worked very hard to create relationships with those retiree organizations and to build that trust. I think we're starting, at least hopefully in my opinion, starting to see the fruits of that work. Um, but we do have an education and a trust factor that we've got to overcome. Um, and it's one of those that, uh, yes, kind of getting in there and marketing and
getting more information. I'm looking to kind of expand that work that the, that EBD does and, and make sure that we're creating that relationship. Cause that's really what's going to change is us having a relationship with these retirees and being able to rebuild that trust. Absolutely. These plans are exactly the same. It was by contract, the MAPD program, the benefit design and the structures and everything that's covered has to match what
is on our health advantage, Medicare supplement plan. So there's no difference in these plans. And we continue to work with UnitedHealthcare to make sure that as they go through network negotiations, that they minimize the negative aura that comes around that. We know network negotiations are going to go on all the time. I'm not going to get in the business of that work. That is their business. That is their work. But it is one of those that both sides need to come together and make sure we're doing the right things in these negotiations, and we're not having these extend and go in and out of network constantly.
But at the end of the day, the premium savings are real. This is not too good to be true. this is true and and the difference is dramatic and it does go back to the liability that shifts from having to self-fund it to then be able to get have an outside entity take on that liability sure and i appreciate all the work that
Senator Jimmy Hickey, Jr
Unverified
35:41
you've tried to do and i don't how many of these organizations would you just speculate that there is
that you're trying to deal with as far as these retirees go one one okay you know I don't know if it at this point because this has went on for so
long and again you know if they if they have concerns like this maybe we should have a public meeting on this maybe we should invite you know our consultant anyone else you know that we need here and try to try to get this explained publicly out here and if they have questions I'd like to hear it from them and then we can either you know see if that's correct or possibly if it's not maybe we can help diffuse that so that we can get these people on board because it's caught it looks
like to me it's costing them a huge amount of money I don't know if there's some higher co-pays that they're having to pay but from a net standpoint it just it just does not make a lot sense to me that they're not signing up so madam chair i don't know if uh and again when the appropriate time of that would be you know if we could consider that in this committee because we've been dealing with this for a while and it just seems like to me that you know whenever we went into this we were expecting the participation to be a certain amount so we could save those
dollars and i just think it's time for us to try to be a little more active as the legislative body on that thank
Representative Robin Lundstrum
Unverified
37:08
you senator hookey i'm all ears um we might want to look at something in january but let's talk off online on that thank you ma'am um representative wardlaw madam chair i'm
Representative Jeff Wardlaw
Unverified
37:22
gonna need a little lead way if that's okay all right so director wallace when when does a contract with blue cross blue shield come
Speaker 8
37:29
up it is the rfp is being drafted now so we have uh through december
Speaker 10
37:33
of 2026 is the current agreement so the we're drafting the rfp now and we'll be doing that process next year
Representative Jeff Wardlaw
Unverified
37:42
so would you agree would you not agree that the blue cross blue shield contract has a
great hold on our retirees when it comes to the level of service they provided for these people so when they're looking at a eight dollar premium and a sixteen dollar premium i think that's the two different premiums for the plans with UnitedHealthcare. It looks too good to be true, and they're paying that $375 or $400,
whatever it is, because they believe that it's just way too good to be true. Yes, sir. The other side of that is, and I worked on this yesterday in northeast Arkansas, hospitals are sending out notices again, and they're going to do this every year, by the way, so this is not going to go away tomorrow, so I want all the members to listen to this. But they're sending out notices that they'll no longer take UnitedHealthcare. They'll no longer take Humana. Folks, they can't no longer take our plan because if they don't take our plan,
Director Wallace, you correct me when I'm wrong here, they cannot take Medicare and Medicaid because our plan is a government plan. So when those letters go out, it causes confusion amongst our retirees, And it makes them think that if they take a UnitedHealthcare plan with us, their hospitals or their doctors will not take it. And it's just not true. That's the battle we're against, Senator Hickey. And that's the battle we have to educate the public on, is the plan is different. If someone sent a letter out tomorrow and said they wouldn't take Blue Cross Blue Shield, we would have a huge problem when it comes to EBD.
But they would take our plan, because our plan is a government plan, and they administer it for us. And that is the difference. And that is very hard to fight in a community that is extremely upset with certain insurance companies. And when those insurance companies administer our plans, we have to be the educated body to talk to our constituents and let them know that this is still going to be taken at those facilities. Am I correct or am I wrong, Director Wallace?
Speaker 8
39:49
Yes, sir. To the entity, they have come out, and when they send out that notice, there
Speaker 10
39:55
is a subsequent line, typically at the very bottom, that says, for state retirees, we will still accept the UnitedHealthcare
Representative Jeff Wardlaw
Unverified
40:03
plan. But that line is so insignificant on that paper, our constituents, our state retirees, are not seeing that line, correct? Correct. And I'm telling y'all, we're the first line battle right here. You guys sitting in the seats, in these representative member seats, are the front line because those constituents are calling y'all first.
And when they call, you have to be educated on this subject to be able to talk to them to let them know that it is safe to pay $8 a month. That it is ridiculous to pay $400 a month when you could pay $8 a month and get the exact same service. We're going to be faced in the next few months because of federal changes with a different pharmacy plan when it comes to these plans. I've instructed UnitedHealthcare to talk to as many members on the committee as possible so you guys are up to date on what that looks like.
But we could be seeing really significant savings in premiums again, which is good because the Inflationary Act that was adopted under the Biden years caused us to see an increase in premiums. So this could take the difference in that effect out. And we're going to be taking that up in January, February time frame in this committee. So that's going to be confusing as well when it comes to our members because instead of one card, they're going to have two cards in their pocket. And any time you change something like that on these members, that's a significant change.
But thank you, Director, and thank you, Senator Hickey. I, too, agree with what you're saying. But until we can cross this battle with our providers, it's almost a losing battle at
Representative Robin Lundstrum
Unverified
41:45
this point. Thank you, Representative Wardlaw. This just leads back to we need to have this discussion. Senator
Senator Justin Boyd
Unverified
41:52
Boyd. Thank you, Madam Chair. So I'm hearing a lot of discussion about what savings this leads to the state and so on and so forth. But I'm also going, OK, so I just, you know, have been reading the Wall Street Journal and I see how many times our partner has been labeled in the news as having concerning information.
And I'm just kind of weighing that going, how many times have I seen our other partner in the news? And they don't they don't balance. So it just makes me wonder, maybe my constituents are reading the news. Maybe they're concerned about that, possibly. Do you read the news, Mr.
Wallace? I mean, are you familiar with some of the allegations that have been
Speaker 10
42:37
made about our, quote, partner? Absolutely, and I address them regularly with our partner. But the concept of a Medicare Advantage group plan is still a very stable and solid concept.
So whether it's UnitedHealthcare or Humana or any of the other entities, the notion and the concept of having this group plan available to our retirees is still a very
Senator Justin Boyd
Unverified
43:00
solid idea. So when we say there's no difference, do we mean there's no difference in prior authorizations? Do we mean that there's no other co-pay differentials? Do we mean that there's no other roadblocks when I compare this plan to that plan? I mean, so there's a reason that Arkansans aren't rushing over to the alternative.
And we sit here and we discuss that, and I understand I'm all for saving money up to a point, But I'm also questioning, you know, does government always know best? And I feel like we're basically saying government clearly knows best in this situation. We know so much better than our constituents. And I'm just not yet convinced that's the case. Thank you. Thank
Representative Robin Lundstrum
Unverified
43:47
you, Senator Boyd. All these are good discussion items. And I think having a meeting
where we can have a primer on how to help our constituents and transparency would be helpful.
look at something for january if we could go
ahead and start that um i would ask everybody to keep this report and spend a little time with it it's a lot of information mr wallace is available with phone call but also if you want to bring it back up and have questions for the body i we are more than happy to do that any other business to be brought before this committee today seeing none we are adjourned
Agenda
A. Call to Order
1. Review of EBD Contract with Public Consulting Group, LLC
B. Consideration for Review and Approval of Actions by the State Board of Finance [Exhibit B1-B4]
2. Approval of Prescription Formularies for September, October and November 2025
3. Approval of Medical Drug Recommendations to EBD Commissions – November 2025
4. Review of Arkansas State Captive Insurance Program Investment Policy Statement
C. Special Report – Arkansas State and Public School Employees Health Benefits – DTSS – EBD – for Fiscal Year Ended June 20, 2024 [Exhibit C]
D. Other Business
E. Adjournment
Documents
Speakers
Representative Robin Lundstrum
Unverified
Speaker 8
Speaker 10
Senator Jimmy Hickey, Jr
Unverified
Speaker 28
Speaker 61
Senator Justin Boyd
Unverified
Speaker 48
Representative Dwight Tosh
Unverified
Representative Jeff Wardlaw
Unverified
Representative Frances Cavenaugh
Unverified
Senator Jonathan Dismang
Unverified
Speaker 81
Speaker 84
Representative Andrew Collins
Unverified
Speaker 23
Speaker 93
Speaker 98
Speaker 6