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Published: Friday, 4/9/2004

Cost analysis convinces Ohio to keep provider

State employees using Medical Mutual of Ohio for their health insurance coverage can remain with the insurer until at least July 1, 2005.

State officials decided last month to recommend that the state switch from Cleveland-based Medical Mutual to Minneapolis-based United Healthcare, effective July 1.

But the officials changed their minds last week, saying "serious questions" had come up regarding United Healthcare's bid for the contract.

As a result, the state intends to stay with Medical Mutual until July, 2005, and have insurers interested in the state's contract resubmit bids.

About 3,000 state employees in northwest Ohio receive care through Medical Mutual-administered preferred provider contracts as well as several thousand of their dependents. Statewide, about 42,000 of the state's employees are in the Medical Mutual plan. That's about 104,000 individuals once dependents are included.

The Ohio Department of Administration had calculated the state would save $28 million by choosing United Healthcare, but later analysis showed only an $11 million savings - and even that estimate appeared shaky, according to Gretchen Hull, a department spokesman.

The state was also concerned about the sufficiency of doctors in United Healthcare's network throughout the state, she said.

Medical Mutual has had the state contract for 17 years.

"We are certain it was a tough decision, but in the end it was right for Ohio," said Jared Chaney, a Medical Mutual spokesman.

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