ALC Insurance: Nov. 19, 2025

Representative Robin Lundstrum Ladies and gentlemen. That clock is not correct. If you’ll look at your phones, it’s 10:00. If you need just a minute to get to your seats and finish up your conversations, let’s start here in just a minute. 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 start with review of the EBD contract. 

EBC contract w Public Consulting Group

Grant Wallace 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 of $1.39 million. The total projected cost for the full seven years is $4.8 million. Be glad to answer any questions. 

Representative Robin Lundstrum I’ll start. That was put out on a RFP? 

Grant Wallace Yes, ma’am. 

Representative Robin Lundstrum Yes. And this was the one that won that contract. 

Grant Wallace Yes, ma’am. 

Representative Robin Lundstrum All right. Any other questions? Senator Hickey. 

Senator Jimmy Hickey Thank you, Madam Chair. Mr. Wallace, just a couple of quick questions. On the RFP that you did, how many people applied and how many of them actually qualified out of that? 

Grant Wallace So, none of them were disqualified. And I think it was five or six total that we interviewed– not interviewed, I’m sorry– went through that scoring process. 

Senator Jimmy Hickey 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 the pricing part? 

Grant Wallace Yeah, 30 percent was the standard. 70-30. This was the low cost. 

Senator Jimmy Hickey Okay, so this was– although you used the 70-30, this was actually the low bid on it?

Grant Wallace Mm-hmm. 

Senator Jimmy Hickey Okay. 

Grant Wallace And they were the higher technical as well. 

Senator Jimmy Hickey Okay, great. Now, is this a brand new type entity that we’ve using or have we been doing this in the past? We’ve been using another vendor?

Grant Wallace Right. It was another vendor that was doing the service underneath our health advantage contract. This, we separated that out, and this is a new vendor that we would be working with. 

Senator Jimmy Hickey Okay. And not to put you on the spot here or anything, but do you remember as far as the costs 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. 

Grant Wallace Yeah, so here’s the tricky part. You know, it’s kind of an hourly rate. I don’t want to say that it was– 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. 

Senator Jimmy Hickey Okay. All right. Okay. Well, I’ll talk about those expenses here in a minute. All right. Thank you, sir. 

Representative Robin Lundstrum All right, you’re very welcome. Representative Eaves, did you get your question answered? Okay. Who is number three? Oh, you, okay, you’re good. All right, any other questions? Senator Hickey, do you want to jump back in on this one? 

Senator Jimmy Hickey My next question is going to 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. 

Representative Robin Lundstrum Okay, let’s stick to B1 right now. All right, anybody else? All right. I need a motion to move as reviewed. Representative Beck. And Senator Boyd was a second. All in favor, aye. All opposed? Motion passes. It’s reviewed. B2. 

Drug formularies

Grant Wallace Okay, these are our formularies. These will be for the quarter, so September, October, and November. We’ll start with the September formulary 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 of keep in line with that. 

Ones that I would point out in September, you’ll see on in the September report on lines six, seven, and eight, that designation of NC3P. Just want to kind of define that a little bit. This is making sure that on the pharmacy 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 benefit and not on the pharmacy benefit. You don’t want that dual running there. You’ll also see some moves to generic medication, preferring  the generic over the brand. Let’s see, that’s all on page one for September. So I’ll pause there to see if there are any questions for the September formulary recommendations. 

Representative Robin Lundstrum Members? 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. 

Grant Wallace 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 do further evaluation on the efficacy and cost evaluation. 

Representative Robin Lundstrum Okay. All right. Thank you. Any other members? All right. Do we have a motion to approve exhibit B2? Okay, so moved. And let’s go to the next– oh, excuse me. 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. Sorry. 

GLP1 Medications

Grant Wallace So going to the October, the only one that I would want to highlight in October would be on page two, lines 16 through 20. These are your GLP1s. We are adding a new coverage or indication. The MASH/NASH conditions, we have found that it is more cost effective to use a GLP1 to treat these conditions as opposed to the normal treatment options 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 up the tiering or dose consolidation, making sure you’re doing the correct pricing on the dosage and we’re getting the most cost effective treatment there. Be glad to answer any questions. 

Representative Robin Lundstrum No one’s lighting up. Go ahead and go to November. 

Grant Wallace 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. Outside of that, nothing I probably would highlight specifically. Be glad to answer any questions. 

Representative Robin Lundstrum 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’ve got a second from Representative Boyd. A motion from, who was that over there? Denise Garner. All in favor? Opposed? Motion passes. 

Grant Wallace Okay, the medical recommendations. Again, just a reminder these are drugs that are administered in a clinical setting. When you see EBRxPA, that EBRs 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 for the current vaccine year. I’d be glad to answer any questions. 

Representative Robin Lundstrum Looks like today’s your lucky day. Members, without seeing any questions, do we have a motion to review or accept as reviewed? Motion to approve. Motion to approve. We have one, Representative Beck. Senator Boyd. All in favor, aye. Opposed? Motion passes. Okay. 

Captive property insurance overview

Grant Wallace 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 Administration, and myself. And we are going in a very conservative kind of initial start. The plan is to review this annually. And we are adhering to state law and investment rules that we’re able to do under current state law. Be glad to answer any questions. 

Representative Robin Lundstrum Senator Boyd? 

Senator Justin Boyd Thank you, Madam Chair. So if you’ll just give me a little bit of leeway, I’d appreciate it. And so Mr. Wallace, clearly we’re moving down this road of the captive. This is opposite of the way we went in healthcare, where we said, Hey, the state isn’t doing a good job, so we’re going to 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 kind of ongoing evaluation are you doing on that? 

Grant Wallace 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 our small pool. We are a big program in the state, but overall in the global market, we are a very small entity. And to be able to negotiate drug pricing with these manufacturers or rebates and those things, I don’t know that we have the capacity to do that at this point. 

Senator Justin Boyd So we weren’t doing that before? 

Grant Wallace No. We’ve always had a TPA, a PBM, that we were working with to manage the drug programs. 

Senator Justin Boyd We’ll follow up offline. I’m not sure that we understand completely, but I appreciate that you’re giving it some ongoing thought. 

Grant Wallace Yes sir. 

Senator Justin Boyd Thank you. 

Representative Robin Lundstrum Representative Tosh. 

School insurance premium impacts

Representative Dwight Tosh Thank you, Madam Chair. Grant, it’s my understanding, and appreciate if you would kind of address this, that some of the schools, that with this captive insurance, it’s my understanding that their premiums are– 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 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’d 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? 

Grant Wallace Yes, sir. I think Representative Wardlaw might have something to say. 

Representative Robin Lundstrum Yes, I’m going to call on him next. I was going to 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 So I can answer most of that question. 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 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 underinsured 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 premium– I mean, more deductibles, and some will see more premiums depending on how their insured value was measured prior. 

Representative Robin Lundstrum Representative Tosh, did that answer your question or do you have a follow up? 

Representative Dwight Tosh No, I really don’t have 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 schools. So I’ll just continue to look at this. And, but I appreciate the attempt to answer the question. Thank you. 

Representative Robin Lundstrum Thank you, Representative Tosh. Representative Cavenaugh. 

Representative Frances Cavenaugh Thank you. I 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? BLR’s not going to sign this. 

Grant Wallace No, I apologize. Thank you for catching that. That should have been a typo 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. 

Representative Robin Lundstrum Senator Dismang. 

Senator Jonathan Dismang 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, and 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 hundred million dollar 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 I just want to make sure everyone understands what that means. That means our smallest, some of our smallest districts in the state were 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 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 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 $100 million property with a $5,000 deductible. No one. 

Representative Robin Lundstrum Thank you, Senator Dismang. Good explanation. Senator Hickey. 

Senator Jimmy Hickey Yes, ma’am. Mine’s back to the actual policy statement here. And Grant, if you’d just ask this question of Stephens or whoever’s doing it. And Lord knows 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 have to–

Representative Robin Lundstrum Senator Hickey, could you tell us where you are? 

Senator Jimmy Hickey 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 it has to be A or better. So I’m assuming 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 just, I was making sure that we weren’t prohibiting something that could actually be something that they would need. 

Grant Wallace So we removed the hedging language because we weren’t mature enough to go there yet. So to get 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 we’ve got an appropriate balance on that. 

Senator Jimmy Hickey Okay, so although we’re listing it in this policy right now as an eligible investment, we’re not planning on going down that route. 

Grant Wallace Right. 

Senator Jimmy Hickey Okay. Then that answers my question. Thank you, sir. 

Representative Robin Lundstrum Representative Collins. 

Representative Andrew Collins Thank you. Over there on page three, number ten, says investment performance will be measured net of fees. What are the fees? 

Grant Wallace So this was a flat line agreement that BLR had negotiated during this transition. So for the first year it’s $450,000. 

Representative Andrew Collins And is that going to– is that projected to go up? Do we know what it’s going to be the next year? 

Grant Wallace There is some– it’s a one year contract. But there were, if it were 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 I could probably get this somewhere else, but what amount are we talking about basically here? 

Grant Wallace Roughly, we’re looking at initially $50 million, five-zero million dollars. 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. 

Representative Andrew Collins Okay. And so, and double check me if I’m wrong, but that’s roughly a little less than one percent. Is that what we’re talking about? 

Grant Wallace Probably. 

Representative Andrew Collins Okay. Okay. Thanks. 

Representative Robin Lundstrum Thank you, Representative Collins. Anyone else? All right. I think everybody’s got their questions answered. Motion to review with correction to change BLR to State Board of Finance on the signature page. Do I have a motion to approve as 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. 

Grant Wallace So this was our special report from legislative audit. The only finding had to deal with the recording of expenses from one fiscal year to the next. Be glad to answer any questions. 

Representative Robin Lundstrum Would you go over the slide on page five where it talks about the increase in the premium and then 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 seven. 

Grant Wallace So yes, our revenue, if you’re– page seven, sorry. 

Representative Robin Lundstrum I’m sorry, on mine it’s page five, exhibit five. 

Grant Wallace Okay. 

Representative Robin Lundstrum Oh, am I looking at the wrong thing here? Exhibit C. Exhibit C. This one. Page five, exhibit five. 

Grant Wallace Okay, so we’re looking at the state employee side. 

Representative Robin Lundstrum Oh okay, I’m looking at public schools. I’m sorry, not state. It’s going to be on, we’re going to page seven. 

Grant Wallace Okay. On page seven. Yes. So we are seeing a decrease in the revenue 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 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 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 All right, that’s helpful. Thank you. Other questions? Senator Hickey? 

Senator Jimmy Hickey So just along those lines, and, of course, I see that this report actually ends for June 30, 2024. So you all have done your analysis since then, and I heard you say we’re still operating at a deficit? 

Grant Wallace Right. So for the plan year 2025–

Senator Jimmy Hickey Which started? 

Grant Wallace In January. We are operating, 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 as 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 And if you know, fine, from January of the start of this calendar year until now, what’s our accumulated total up to whatever you’ve got it to? 

Grant Wallace Right now, I want to say that it’s 30 to 40 million on the public school side is what we’re looking at ending the year with. 

Senator Jimmy Hickey And we’re still positive, of course, on the state employee side? 

Grant Wallace Correct. 

Senator Jimmy Hickey Okay. All right. And what do you think is going to correct that? So you said legislation. 

Grant Wallace Right. So during this past legislative session they increased the district match. 

Senator Jimmy Hickey Okay. But you all are keeping a running total of this month by month? 

Grant Wallace Yes, sir. 

Senator Jimmy Hickey Okay. I wouldn’t mind, Madam Chair, if we could have that included into this report. I mean, I just think that that’d 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 know also. 

Grant Wallace Right. I’ve generally included that as kind of background information. I probably just brain fart forgot to do it on this one. But yes, I’ll make sure you get that.

Representative Robin Lundstrum And that would be good. Thank you. Thank you for that suggestion. 

Senator Jimmy Hickey And I do have some questions about participation in this. I don’t know if now’s the right time or if you want to go to someone else.  

Representative Robin Lundstrum No, let’s go ahead and do that and then we’ll go to Representative Wardlaw. 

Senator Jimmy Hickey Okay. So on the participation side, do you know where we’re at as far as on the school employee side, on the MAPD and the–? 

Low public school health plan enrollment

Grant Wallace 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 percent 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. 

Senator Jimmy Hickey Okay. My question’s this, 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, 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’ll help us get it out to that community? Because, again, I understand that maybe there was some worry about who the providers were going to be. I don’t know that that’s still the case. And, like I say, I know we’re showing this deficit on this side. I just think that possibly we need to try to do some more outreach to try to push this. 

Grant Wallace 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. This has been a huge headwind that we’ve battled since I took office. 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. But we do have an education and a trust factor that we’ve got to overcome. 

And it’s one of those that, yes, kind of getting in there and marketing and getting more information. I’m looking to kind of expand that work that EBD does and make sure that we’re creating that relationship. Because 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 United Healthcare 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 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. 

Senator Jimmy Hickey Sure. And I appreciate all the work that you’ve tried to do. 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? 

Grant Wallace One.

Senator Jimmy Hickey One? Okay, I don’t know if at this point because this has gone on for so long, and, again,  if they have concerns like this, maybe we should have a public meeting on this. Maybe we should invite our consultant, anyone else you know that we need here and 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 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 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 does not make a lot of sense to me that they’re not signing up. So, madam chair, I don’t know if, and, again, when the appropriate time for that would be, 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 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. 

Representative Robin Lundstrum Thank you, Senator Hickey. All ears. We might want to look at something in January, but let’s talk offline on that. 

Senator Jimmy Hickey Thank you, ma’am. 

Representative Robin Lundstrum Representative Wardlaw. 

Representative Jeff Wardlaw Madam Chairman, I’m going to need a little leeway if that’s okay. 

Representative Robin Lundstrum All right. 

Representative Jeff Wardlaw So Director Wallace, when does the contract with Blue Cross Blue Shield come up?

Grant Wallace The RFP is being drafted now. So we have through December of 2026 is the current agreement. So we’re drafting the RFP now and we’ll be doing that process next year. 

$8 vs $400

Representative Jeff Wardlaw So would you agree, or 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 an $8 premium and a $16 premium– I think that’s the two different premiums for the plans– with United Healthcare, 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. 

Grant Wallace Yes, sir. 

Hospitals will take plan

Representative Jeff Wardlaw 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 United Healthcare. 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 where 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 United Healthcare 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 that 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? 

Grant Wallace Yes, sir. To the entity, they have come out, and when they send out that notice, there is a subsequent line, typically at the very bottom, that says: ‘For state retirees, we will still accept the United Healthcare Plan.’ 

Representative Jeff Wardlaw But that line is so insignificant on that paper. Our constituents, our state retirees are not seeing that line, correct? 

Grant Wallace Correct. 

Representative Jeff Wardlaw And I’m telling y’all, we’re the first line battle right here. You guys sitting in the seats, in these representative members’ 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 United Healthcare 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 some 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 anytime 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 this point. 

Representative Robin Lundstrum Thank you, Representative Wardlaw. This just leads back to we need to have this discussion. Senator Boyd. 

United Healthcare reputation

Senator Justin 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, okay, so I just 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 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 made about our, quote, partner? 

Grant Wallace 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 United Healthcare 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 solid idea. 

Senator Justin Boyd 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 copay differentials? Do we mean that there’s no other road 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, does government always know best? And I feel like we’re basically saying the 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. 

Representative Robin Lundstrum Thank 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. We’ll look at something for January if we could go ahead and start that. 

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 a phone call. But also if you want to bring it back up and have questions for the body, we are more than happy to do that. Any other business to be brought before this committee today? Seeing none, we are adjourned.