The Department of Finance and the Office of Management and Budget are warning that unless the Legislature approves Gov. David M. Apatang’s revised budget by Dec. 15, thousands of government employees, retirees, and their dependents could lose medical coverage under the Government Health and Life Insurance program at the start of the new year.
“The governor has called for an emergency session by Dec. 15 so that we can get this budget passed, start open enrollment, and ensure people have uninterrupted health insurance coverage,” Department of Finance Secretary Norita told reporters during a break in last Dec. 11’s Joint Committee Meeting on House Ways and Means and Senate Fiscal Affairs at Capitol Hill.
She said the GHLI program is at the center of an urgent fiscal and healthcare crisis, as the current Aetna insurance contract is set to expire on Dec. 31. The Apatang administration is taking every step possible to avert a disruption.
“We want the public to know that we're working very hard to support the governor's budget. We have successfully secured the $29-million loan that supports the budget package, Scenario 1. This means we are able to act on the GHLI program and secure health insurance for our active employees and retirees. It is a fully actionable budget expenditure plan now with the Legislature for their approval,” she said, referring to the original $138-million revised budget.
Norita emphasized that, because the CNMI is currently facing a health care crisis, the Legislature must act on the $138-million revised budget submitted last October.
“After Oct. 14, we became aware of $1 million from MPLT and an additional $4.9 million from the Public School System. While there are ongoing discussions about these other sources of funds, we cannot delay action because of this $5 million. Let’s move forward with the $138 million so we can address the GHLI program immediately,” she added.
Norita also noted interest in the Legislature passing the $144-million revised budget submitted last November.
“We'll push for that—$144 million is better for everyone. But given that it is already Dec. 11 and our health insurance expires Dec. 31, we cannot afford to wait. The budget is fully actionable, and there is no reason it cannot pass,” she said.
When asked about the single most urgent threat to the Commonwealth, Norita’s answer was unequivocal: funding for GHLI.
“As a mother of three children who rely on this coverage for school checkups, as someone who used the same coverage during my pregnancies, and as a daughter whose parents use Aetna, I can say GHLI is a top threat to the CNMI right now,” she said.
She added that approximately 7,000 people—“real lives”—depend on GHLI coverage.
“There are people referred to the Philippines, Taiwan, and elsewhere who assume they will have coverage until they return. What happens if they are still hospitalized on Jan. 1 with no coverage? How will they be discharged? I think about my staff who rely on medications for diabetes and high blood pressure. One of my staff would have to pay $400 for each refill if coverage lapses. I worry about them and others who may not be able to come home because they cannot pay their medical bills,” she said.
Normally, GHLI open enrollment begins in October, allowing enrollees to update their plans and the government to execute its annual rate agreement with Aetna. That process did not occur this year, according to Norita.
She explained that without a legally enacted budget, she cannot certify the funds needed for a new contract. Without certified funds, the government cannot negotiate rates, initiate open enrollment, or guarantee coverage beyond Dec. 31.
During the hearing, Norita presented three options. The Apatang administration urges the Legislature to adopt the governor’s revised budget, which includes full funding for GHLI. If passed, Finance could immediately finalize a new rate agreement with Aetna, maintain current premiums and benefits, and prevent any interruption in care.
The other two options carry severe consequences. The first is to terminate the existing plan and renegotiate a scaled-down agreement using only the funds in the recently passed $2.8-million House bill for retirees and the active-employee allocation already in the budget.
Norita described this as the “nuclear option.” With only a fraction of the required annual funding, Aetna would offer a catastrophic-style plan, with substantially higher premiums and deductibles that could reach $10,000. Many employees could be priced out entirely, and the risk pool would collapse.
The second alternative is to end the Aetna contract entirely and seek a new provider. Norita said this is also unworkable, as other bidders last year were significantly more expensive. Moreover, the Commonwealth Healthcare Corp. expects about $60 million in Aetna claims revenue, which would vanish if the government abruptly switches carriers.
OMB special assistant Virginia Villagomez stressed the urgency, noting only 11 working days remain before the second quarter. She said failure to act will not only cut off medical care for thousands but also create a revenue shock for CHCC and destabilize government operations.
Lawmakers also raised longer-term concerns, including the high cost of insuring retirees, particularly those over 65 who may be eligible for Medicare but remain on the Aetna plan.
Norita said the Apatang administration is working with Aetna and the Settlement Fund to identify which retirees should transition to Medicare as their primary coverage. Lawmakers discussed studying Guam’s model, where the government reimburses Medicare premiums for retirees, significantly reducing local plan costs. GHLI officials said they are open to reforms and will supply retiree-age data and cost breakdowns in the coming weeks.
Norita reiterated that none of these long-term reforms addresses the immediate threat. She said without a revised budget, the Commonwealth cannot legally commit the funds Aetna requires for a new annual contract.
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