These Doesn't Seem to be Any Savings in Scott Walker's Self-Insurance Plan

Wisconsin is looking again at self-insuring state workers.  (Wisconsin State Journal, 5/27/2014)

Excerpt:

Better to have written  Self-insurance will eliminate $20,000,000, such as Affordable Care Act fees, but additional costs will more than likely wipe out this savings.

Here's the conclusion from the 2013 Deloitte report, Self-Insurance Advisability Assessment and Actuarial Cost-Benefit Analysis.  (Bold added)

At a state level, the gains from the absence of ACA fees, premium taxes, profit and contingencies is offset by the potential increase in claim costs arising from the absence of the tiering model. However, as noted the impacts vary by region.

A comprehensive RFP process is strongly recommended to further refine the analysis and validate the provider discount/reimbursement rates and potential cost savings. In particular, the impact of potential health provider disruption and any potential cost-shifting to employees due to provider disruption needs to be further investigated.

Based on the need to complete a comprehensive RFP process before implementation of a self-insurance arrangement, a 2014 effective date is not feasible for a pilot program. If the State decides to pursue a formal comprehensive RFP to select potential self-insured TPA/carriers for a pilot program anticipated to be effective January 1, 2015, the timing will need to be carefully managed. Such an RFP would require significant lead time and would likely need to be released in early 2014.

Finally, it should be noted that the short term “quick-wins” of a self-insured arrangement need to be balanced against the potential long term risks of a self-insured arrangement. The risks range from uncontrolled utilization and trend increases to catastrophic claim events which could possibly be managed through reinsurance at a cost.

Thus, any move to a self-insured arrangement needs to proceed with caution, and particular attention paid to the drivers of claims experience as the State becomes liable for unexpected variances in costs. Consideration of the impact on the Local program also needs to be evaluated as part of the process