The State Employees' Group Health Insurance Program has experienced growth in health care costs resulting in projected program deficits beginning in Fiscal Year 2001-02. Expenses are projected to exceed revenues by $28.8 million in Fiscal Year 2000-01 and are projected to exceed revenues by $121.3 million in 2001-02 and $225.1 million in 2002-03. The Legislature should consider options in four areas to better control costs, provide enrollees more choices for their health insurance benefits, and address contribution rate inequities:

• modifying the health insurance plan design;
• modifying the contribution rate design;
• increasing medical claims cost controls; and
• increasing prescription drug cost controls.