State workers, taxpayers, UnitedHealthcare of New England and Blue Cross & Blue Shield of Rhode Island all deserve better than they got from state officials in what has become an embarrassing saga – the awarding of the state’s health insurance contract.
Superior Court Judge Netti C. Vogel took the Carcieri administration to task on Friday, Dec. 3, ruling that the three-year contract awarded to UnitedHealth in early October would have to be re-bid. Just days before, Vogel had ordered a preliminary injunction and in a written statement she blasted state officials for a bid process gone awry. Vogel said there was “overwhelming evidence that the procurement process was characterized by both a palpable abuse and a clearly unwarranted exercise of discretion.” She said that Blue Cross was denied “fair consideration of its bid.” She added that state officials and consultants were unfamiliar with relevant state purchasing laws.
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There are plenty of victims in this case. First and foremost, the 52,000 state workers, retirees and dependents left to wonder – and worry – about the future of their health care coverage.
Blue Cross is an obvious victim. Officials at the insurer believe they got a raw deal – that the state didn’t give them a fair chance to renew the state contract and nothing that was written or said by Judge Vogel did anything to counter that belief.
UnitedHealth, too, is a victim. In going after the state contract, UnitedHealth identified a real opportunity for growth. It was an aggressive move – one that may still come to fruition. But now, after believing it had won a difficult competitive battle, the insurer is being told that it must go at it again. UnitedHealth has also incurred thousands of dollars in startup costs in anticipation of taking over the state contract.
It is difficult to assess how this all unraveled. Blue Cross & Blue Shield of Rhode Island certainly earned the ire of state officials over the course of the past year or so. The well-documented payouts and bonuses to Ron Battista, its former president and CEO, were inexcusable given the rising costs of health insurance. Its massive reserves also came into question at a time when everyone was looking for some relief in terms of controlling health insurance costs.
But none of that should matter when it comes to the state health insurance contract debate.
UnitedHealth has said that it is willing to go through the process again, if it must. In the end, we imagine that the company would prefer to win the contract without any of these controversies attached to it.
When this issue is settled, the conclusion should be a more affordable health plan for Rhode Island taxpayers – one that provides all of those enrolled in it first-rate health insurance coverage.
That is, after all, the paramount concern – and the only thing that should really matter in all of this.
