Mon Commission grappling with soaring insurance costs
MORGANTOWN — 'This is just not sustainable.'
Monongalia County Commissioner Tom Bloom lamented that the annual increases in the cost of group employee health insurance is on a trajectory that will consume an untenable percentage of the county's overall budget in the near future without intervention.
On Wednesday, the commission approved a proposal from Highmark Blue Cross/Blue Shield that comes with a 20.48% cost increase to the county when it takes effect Aug. 1.
All told, the percentage increase absorbed by the county will total just over $1 million.
Commissioner Sean Sikora explained that the final agreed-upon number was actually negotiated down significantly from Highmark's opening offer, which would have kept everything unchanged from the current plan — except the cost, which would have jumped 34.8%.
In order to bring the percentage down, the commission agreed to raise employee deductibles from $6,000 single/$12,000 family to $7,000/$14,000. That disclosure was followed by a commitment from the commission to cover all employee deductibles at a potential maximum cost of $900,000.
There will be a change on the employee end. Co-insurance — the percentage of a medical bill the patient pays after meeting the deductible — will increase from 10% to 20%.
'Really, that's the only negative impact to the employees,' Sikora said. 'There's two positive impacts. One, they're not getting a premium increase when there is one — a significant one. Two, they're not having to pay any deductible, which previously they had to pay $750 or $1,500.'
Sikora explained that the county, like many other public and private entities, is facing what's known as the 'group plan dilemma' in which costs rise higher and higher while the level of satisfaction – either from employees, employers or both – falls.
Embedded within the group plan concept is the inevitability that a small number of individuals will push costs up for everyone.
It was explained that the offer Highmark first presented to the county was predicated on the fact that the company paid out 23% more than it collected in premiums in the current cycle.
'The problem we're dealing with is our experience in claims is what's driving our cost. There's nothing we can do about that. It's really just what they call in the industry the 'group dilemma.' Having these group plans, if we put it out to bid or we ask for a new proposal, we're paying for our experience. All that information is known and all that information is out there. We have a small portion of our participants that account for nearly 50% or 60% of all our claims, and those aren't going away.'
While the commission opted to move forward with the Blue Cross/Blue Shield proposal, the insurance discussion isn't over.
The body recently heard a pitch regarding ICHRA, or Individual Coverage Health Reimbursement Arrangement, through which employees would work with a consultant to select their own health plan options from various insurance carriers and the commission would reimburse employees tax-free for premium costs up to a defined amount.
As it stands, the commission is looking at an overall insurance spend of approximately $6 million in a $43.6 million budget. That's up from about $4.9 million.
Based on recent history, there's no indication the county won't be back in this position a year from now.
'And that's just not realistic. That's not acceptable. We have to look at other options,' Bloom said.
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