Insurance rates throw wrench into budget plan

Wednesday, December 1, 2004

Just as work on a proposed county budget has been completed, Carroll County government officials are again confronted with a potential budget-breaking employee health insurance rate increase.

Notification of the increase was received from the Municipal Health Benefit Fund of the Arkansas Municipal League on Nov. 10, indicating a $112,000 per year increase effective on Jan. 1.

In reviewing the budget during a county insurance committee meeting Monday morning, County Judge Mike Botelho stated that currently $4,000 per employee is budgeted for insurance, while current cost is about $3,300. He suggested that the $340 surplus could be combined with the $27,000 in undesignated general revenues in the 2005 budget to continue some type of employee insurance.

He stated that he was opposed to modifying the budget, which is expected to be voted on by the quorum court at its regular meeting on Dec. 9.

Insurance Committee Chairman Eva Reeve noted that Municipal League figures show that insurance usage by county employees has decreased this year.

The rate structure for Class 6 of the Municipal Health Benefit Fund shows employee cost of $405 per month, and cost for dependents as $495 per month. Costs of optional coverages to not appear to be changing.

Road department and sheriff's office employees were reported to be complaining more about the current insurance than about the Blue Cross/Blue Shield plan in effect in 2003. Road Department Supervisor Wendell Coatney stated that five of his employees say they will quit if insurance rates go up again, and others are saying they will get insurance elsewhere.

Complaints about the current coverage include difficulty in dealing with health fund administrators and non-payment. It was reported that some sheriff's employees are getting sued for non-payment of medical bills.

Reeve stated that there were also complaints about the Blue Cross/Blue Shield service in 2003, and noted that Carroll County's situation is not unique, as employers nationwide are confronted with continued escalating premiums.

One option, she said, is to give each employee a certain amount of money and let them find their insurance company. The problem with that, however, is, with its older employee population, several are uninsurable while younger employees could get far better rates than currently being charged.

"Our average age is 55," she said. "We need young, healthy non-smoking males who can get coverage cheaper. I think it's a last option."

Another option is for the county to cover cost of core coverage, with limits, while employees picking up other costs of coverage.

Robert Inzer, of Camden, who services insurance for many counties and cities throughout Arkansas, reported that Blue Cross./Blue Shield declined to quote on employee insurance for Carroll County, citing "ongoing medical risks."

A snapshot of experience in Carroll County by the Municipal Health Benefit FUnd shows that premiums paid in for May through October totaled $195,076.38, while claims paid totaled $300,069.48. It was not clear whether those premiums and claims were for the same time period.

"I'm surprised Carroll County did not get a mid-year adjustment," Inzer said. He noted that two counties got rate cuts by going with a partially self-funded plan, which has a limit on benefits.

Speaking about the big picture of health insurance in the country, Inzer said "We've got to be more responsible as healthcare users, and we've got to ration health care those without health care get," He stated that a person in jail and on Medicaid may get coverage for a health problem while a regularly insured person is not covered.

Said Reeve, "We've got to encourage people to be more responsible for their health. If we're in a healthy world and have to subsidize unhealthy behavior, cost is going to drive us."

Justice of the Peace Larry Fry noted that in the past the county had health screening, but quit it as the information being collected was being supplied to companies, leading to increased costs.

Judy Worley, of the county treasurer's office, said that if premiums keep going up, raises still have to be provided, indicating that the situation is coming to a point where employees could have good insurance but no retirement program.

Botelho said that the situation is urgent, as the health benefit fund change takes effect on Jan 1.

"The impact of this is stunning, " he added.

Reeve said that people have to be aware that "this is not just in Carroll County. It's happening throughout the country. It's the same situation as last year, only a little bit worse."

Inzer said that he could gather hard numbers on insurance premiums from a number of providers by week's end. The committee will meet again on Tuesday at 10 a.m. to consider those proposals.

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