Quarter million more
WINTON – “There’s no way around this increase; we’re just going to have to take it on the chin.”
Those were the words of Hertford County Manager Loria Williams as she shared the hard, cold facts that the county’s health insurance carrier is asking for an increase in premiums for 2017-18.
“It’s health insurance renewal time, and what we spoke of back when we held our strategic planning session, the cost drivers in our budget, is coming true,” Williams told the Hertford County Board of Commissioners at their regularly scheduled meeting on Monday morning.
“We had a snapshot of our (medical) claims in the health insurance pool, and I gave you a range of where I thought the (insurance premiums) increase would be, how high it could be because our claims are higher than the premiums we are paying,” Williams continued. “I figured the increase would be somewhere between 10 and 34 percent. It came in at 20 percent. That is equivalent to $248,000. It has 100 percent to do with our claims and we had some pretty serious claims, serious health issues in this budget year. That is driving this increase.”
The reason Williams said she was bringing up the increase in health premiums now instead of waiting until budget time is due to having some extra time to seek out other options that may lower the rate.
Williams said she did “shop around” for a better deal, but it appears that the county’s current medical insurance provider – MIT – is still able to provide the better overall plan, despite the increase.
“If we’re going to make a plan change, we have let our provider know immediately,” Williams said. “But I’m not recommending a plan change.”
Based on options given by three other providers, all had higher physician/medical specialist copays, deductibles, pharmacy (drug) copays, maximum out of pocket expenses, and payment premiums. The latter cost was as high as 53 percent (for employee only) in the case of one provider.
Under the current year contract with MIT, Hertford County local government employees have their individual monthly premiums ($516) covered as part of their salary package. Should the county renew its contract with MIT, the individual employee insurance premium will rise 20% (to $619) for 2017-18.
As far as “add-on” coverage, which is paid in full by the employee, they can expect a 20 percent, across the board increase when they add their spouse, child, children and/or entire family to the plan. Those premiums range from $929 (for employee/child; up from $774) to $1,859 (for the family plan; up from $1,549).
Other key costs in the MIT plan (current vs. 2017-18) will see no changes in primary care and specialty care copays ($20/$40), deductible ($2,500), out of pocket family maximum ($11,000), urgent care copay ($40), emergency room copay ($300), hospital services (deductible/70%), and pharmacy copay ($4/$40/$55). Vision exams also remain at 100% covered.
Williams noted that she did receive another option from MIT that was lower in cost, but higher in out of pocket expenses, to include deductibles.
“It was a 10 percent increase in cost, but it’s a watered down plan that does not offer our employees what they have now,” Williams remarked.
“I agree with the county manager about keeping the same plan as we now have,” Commission Vice Chairman Curtis Freeman stated. “From looking at these other options, it’s the only choice we’ve got, despite a 20 percent increase.”
In an effort to control possible increases in years ahead, Williams said the time is now to start addressing the fact that county employees need to enroll in a wellness program.
“That’s the key in getting a reduced rate,” she stressed.
“I thought we talked about initiating a wellness plan before; do we have a wellness plan,” asked Commissioner Johnnie Ray Farmer.
“We had started the first leg of that; having our insurer to come in and perform (health) screenings to give us a snapshot of where we are,” Williams answered. “But we haven’t got into a bonafide wellness program, which now we must start. We need our employees to take part.”
However, the county manager wanted to make sure that the commissioners, and the local government workers, understood that the insurance cost savings tied to a wellness plan are not immediate.
“You don’t start seeing the positive effects of a wellness program until you’re about two to three years in it,” she stated.
If there is any silver lining to the projected rate hike, Williams said the medical insurance costs for county employees were higher in 2013-14 before the plan change was made to MIT. At that time, the monthly premium paid by the county per employee stood at $662.96. When county officials changed the medical insurance plan to MIT, they realized an immediate savings of $400,000.
“We’re still under where we use to be, but the reality is now we’re looking at a $248,000 increase and there’s no guarantee, based on our claims and the lack of a wellness plan, that it won’t increase again in the future,” she said. “What’s really painful right now for our employees who add medical coverage for their spouse and children, they’re looking at a 20 percent increase in those costs.
“We need to get a wellness plan started now to help control future increases,” Williams added. “Our employees need to see where these numbers are and how they can help themselves by enrolling in a wellness plan.”