County cuts health insurance

Posted 6/16/09

The county, self-insured, has been facing a higher number of more expensive claims over the past two years or so, but things took a severe turn for the worse over the past few months.

Employee premiums — which are fully paid by the county …

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County cuts health insurance


Prepares to spend additional $500,000With claims and costs soaring, Park County commissioners opted on Monday to cut back its employees' health insurance benefits and prepared to pull a half-million dollars from reserves to cover expected shortfalls in the county's insurance fund.“Welcome to health care in America,” said Commissioner Dave Burke at the outset of a special two-hour meeting on the subject Monday morning.

The county, self-insured, has been facing a higher number of more expensive claims over the past two years or so, but things took a severe turn for the worse over the past few months.

Employee premiums — which are fully paid by the county — were increased in July 2009, but that wasn't enough.

Monthly claims averaged nearly $208,000 this fiscal year, and the county burned through about $600,000 in insurance reserves. The county's combined losses in January and December topped $457,000.

To get the hemorrhaging fund through the rest of the fiscal year, the commissioners on Monday began the process of drawing $500,000 from reserves. That's in addition to an extra $200,000 the county had shifted to the insurance fund last week — money that had been earmarked for wage adjustments.

Keri Wilson of the county's auditing firm of Stine, Heiser, Buss and Associates, said she had expected the county's reserves to maintain or improve, noting that they broke even in 2008-2009.

“We did not expect this to happen. Your claims have gone extremely, extremely high,” she said. “The fact that you got where you are is a surprise.”

In the first seven months of this year, the county has had 14 individuals with claims over $25,000, said Park County Clerk Kelly Jensen on Wednesday — a number she believed is well above average. And, “We still have five months to go,” she said.

On Monday, commissioners made a number of changes to their plan, generally following recommendations from a group of county employees on an insurance committee and the county's third-party administrator, Meritain Health.

The changes take effect March 1.

Before the changes, county employees were responsible for only a $35 co-pay for physician office visits. As long as the procedure took place in the doctor's office, chemotherapy, MRIs, and other expensive treatments would be paid for by the county, except for the $35.

Now, employees must pay a $50 co-pay for physician's visits, with the county paying no more than $200 a year.

The county's deductible remains at $2,500 for individuals and $5,000 for families. However, after that deductible is reached, the county will no longer pick up 100 percent of costs. Instead, employees will responsible for paying 20 percent of the costs until they hit a $5,000 out-of-pocket cap for individuals or a $10,000 cap for families.

When the insurance committee looked at other insurers, such as other counties, insurance committee member Monte McClain said the 80-20 split appeared to be standard. McClain is the communications supervisor for the Park County Sheriff's Office.

Meritain had suggested that if the care took place at a location outside the county's network the split would drop to 60 percent county funding/40 percent employee.

But commissioners balked at that recommendation, saying it would potentially penalize county employees who choose to get their healthcare at Powell Valley Healthcare, which is not a member of the county's network.

Based on this year's claims, Meritain projected that if the county had done nothing, the insurance plan would have cost $3.1 million in the next fiscal year, which begins July 1.

The proposed cuts and changes were projected to save a little more than 23 percent in the coming year, or about $513,000.

However, it was not immediately clear what impacts the comissioners' tweaks would have.

Meritain told the county to expect a 45-day lag before seeing any savings, said McClain.

The county does have re-insurance — stop-loss protection that covers individual claims over $50,000. However, Mark Skansberg of the Wyoming HMO WINhealth Partners told commissioners that it sounded like they did not have high enough insurance on aggregate losses.

Skansberg also said that having a 200-employee pool might have been OK 30 years ago, but “In today's economy, the cost of health insurance is very dangerous. It's a matter of luck at this (200 employee) level.”

At the end of January, the county had 136 employees enrolled in family coverage, and 67 on individual coverage, said Park County Clerk Kelly Jensen. The plan covers county employees, the board of commissioners and the paid staff of the county boards, such as personnel with the county libraries, museum and fair.

With today's medicine, people with cancer can live longer with serious, expensive illnesses like cancer, and, “a premature baby can be a million dollars before they leave the hospital,” said Skansberg said.

He said WINhealth could get the county a fully-insured plan “for what you're at now.”

The county plans to look at an HMO, private insurance carriers, and other tweaks to their plan.

“This thing is going to be a work in progress,” said Commissioner Burke.

Park County Attorney Bryan Skoric said the county needed to get out of the health care business.

“You can't throw taxpayer money at a broken system,” said Skoric, saying the previous setup lent itself to abuses by county employees and doctors.

“When you're going in and having a $10,000 procedure for $35, something's wrong,” he said.

County-covered employees and their families had roughly 1,300 doctor visits in the last seven months.

County Treasurer Nena Graham-Burke and other members of the insurance committee said they feared the cuts would discourage employees from seeking preventative medical attention when they became ill.

“It's going to hit all of our employees in the pocket, big time,” Graham-Burke said. “I wonder how many county employees are going to have $1,800, $2,000 to have that MRI done.”

“I don't want to eliminate the benefit for the employees,” said Commissioner Burke. He said benefits were an important draw for the county in bringing in employees.

For some time, Commissioner Tim French and Burke could not agree on what the county would pay on physician visits. Burke wanted to follow the insurance committee's recommendation that the county pay up to $400 a year.

French, said that it was time to do something “drastic,” wanted a maximum of $150.

French said the county needed to consider the taxpayers.

“What about the people out there that are paying the bill and they don't have any insurance, period?” asked French. “Is it reasonable to ask the employees to participate?”

“Really, we should not be able to leave this room until we have something. We have to make a decision,” said Commission Chairman Jill Shockley Siggins after French declined to second two attempts by Burke to make the changes. Commissioners Bucky Hall and Bill Brewer were absent — Hall on vacation and Brewer with medical problems — meaning that all three commissioners had to agree to pass a motion.

They compromised at the county paying a maximum of $200 annually.

“Oh God — that's nothing!” whispered one employee in attendance as the commission prepared to approve the reduced benefits.

Park County Sheriff Scott Steward asked the county to be cautious and not “shotgun” their approach.

He noted that the money being used is coming from funds that taxpayers have already paid.

“We're not going out and taxing them any heavier to pay for this,” he said.

French responded that the $500,000 infusion was essentially a budget increase.

Commissioners said they will continue to examine the plan.

“I don't know that all of us completely understand what we're dealing with and what these changes will mean to our health insurance plan,” said Siggins.