The Senate approved SB 287 on Tuesday. There were two important amendments adopted on the Senate floor that changed a portion of the pharmacy benefit and clarified the public nature of certain state contracts.
The first amendment removed the proposed Maintenance Medication Retail Pharmacy Network and the optional mail order system that had drawn strong opposition from local pharmacists. The bill now requires the state’s pharmacy benefits manager (Medco) to achieve $18 million in savings in 2009-10 and another $20 million in 2010-11. These savings will come from reductions in the reimbursements paid to pharmacies for all prescription drugs covered by the State Health Plan.
The savings generated by this new pharmacy provision are substantially less (roughly $54 million) than the projected savings that would have been achieved through the Pharmacy Network. To offset this shortfall, the amended bill increases the premiums paid by employing state agencies and premiums for dependent coverage by 8.6% in both 2009-10 and 2010-11. In the original bill, this premium increase was 7.8%.
Senate Bill 287 was heard on Thursday morning in the House Insurance Committee. However, the Committee did not take action on the bill and scheduled further discussion for Tuesday, March 31. Several members raised concerns about moving the bill forward without thorough review.
Our primary concerns regarding Senate Bill 287 were not addressed in the Senate. We believe the additional financial costs placed on lower income retirees by increases in deductibles and the annual out-of-pocket maximum will be especially burdensome.
Call your Representatives in the House. Please let your House members know that Senate Bill 287 doubles the annual deductible (to $600) and raises the annual out-of-pocket maximum by $1,000. These are significant increases for state retirees.
Senate Bill 702: Extend Phased Retirement Program Exemption
(Primary Sponsor – Senator Rand)
This bill extends the exemption for University employees who participate in the Phased Retirement Program from the six-month separation from service provision that applies to retired teachers and state employees. The exemption would be extended from June 30, 2010 to August 31, 2013. This bill has been sent to the Senate Committee on Retirement, Pensions, and Aging.
Senate Bill 703: State Treasurer Investments
(Primary Sponsor: Senator Rand)
This bill expands and clarifies the authority of the State Treasurer to invest monies of the retirement systems and other funds managed by the Treasurer. The bill authorizes the use of a variety of inflation-linked investment vehicles not to exceed 5% of the market value of all invested assets of the retirement system. The bill is supported by Treasurer Cowell and has been referred to the Senate Finance Committee.
BILLS INTRODUCED THIS WEEK