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No merger for Health Care Authority, Retirement Systems

• Published June 29, 2009

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One of the first group of government streamlining moves outlined this year was combining the Health Care Authority and the Department of Retirement Systems. Since one handles public employee health insurance, and the public employee pensions, it seemed to be an opportunity for both cost savings and better customer service.

But having studied the idea for four months, Steve Hill says he does not plan to pursue legislation that would officially merge the two agencies. Instead, he’ll continue in his role as head of both, and inter-agency agreements will blend operations where desirable, he said.

"I think there is a relatively small financial gain. It’s in the neighborhood of a couple million dollars, and I don’t think you really getting it," said Hill.

That compares to cutting $250 million out of the Basic Health Plan – a program that does not share a customer base with DRS – Hill noted, saying the Health Care Authority had more pressing demands.

And stakeholders (retirees, presumably) have protested merging DRS with the Health Care Authority, concerned that their voice on pension issues would be lost amid health care debates, Hill said.

He advised the governor he recommends against the merger, which would have required legislative approval. "I told her my position was the legislation would not actually go through."

That said, he said the two agencies are cooperating more than ever, and pointed to specific projects, such as sharing demographic data so shared customers do not have to update their contact information twice.

Jeffrey Jaksich, an active member of the local state retirees council, called the decision "a wonderful thing."

"The reality is underneath is that there are major structural problems," Jaksich said, downplaying Hill’s analysis’ of the situation.

He noted that both state pensions and state health care are rapidly changing, and not, in his view, for the better.

"There are some major, major problems and those are two critical areas," he said. 'Having some one over the two agencies just doesn’t work."

At least for the foreseeable future, however, Hill expects to remain as head of two separate agencies.