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- _ PF AUG -29 1983 0009 54 PAGE Dr. Hardin believed that the pre-existing feature for new employees discussed by Mr. Chalmers could be provided by Gulf Life without charge, and this was confirmed by Mr. Schlitt. Chairman Bird agreed the plans are very similar, but he had a strong feeling that some of the features of the Aetna policy and the previous experience we have had with them must be given a value, so that there is not actually a $19,000 gap. He noted that we have indicated to our employees there probably will not be any salary increase this year, and he was reluctant to do that and in addition confront them with a new insurance company in which they may not have as much confidence. Although competitive bidding is good, the Chairman noted that if it is done too often, it can work in reverse, making companies reluctant to bid on something so complex if they will only be sure of having it for one year. Skip Eynon, representative of Aetna, discussed the 3% premium difference, or $19,000 differential, noting that if they eliminated their co-insurance second -year carry-over benefit and quoted on the same basis as Gulf, that would be a 1% reduction in premium, and to add the mandatory second surgical opinion is another 1% reduction. Mr. Eynon noted that it all comes down to claims and expenses in the long run and eventually will work out to the same cost for either company. He therefore, believed that the level of service provided is an important factor to consider. Commissioner Lyons believed that competitive bidding is good and provides an opportunity to really evaluate what we have and/or might have. It does present a problem, however, because there are so many factors to consider. He personally felt there are three things that made up his mind in favor of Aetna: 10 _- M M i