10-30-02: Local counties to pay lots more for health insurance

10-30-02: Local counties to pay lots more for health insurance

By TIMOTHY COX
The Daily Standard

    The cost local counties pay for health insurance for their employees is set to increase by about 30 percent next year.
    County officials who are part of the Midwest Employee Benefits Consortium (MEBC) met in Wapakoneta on Tuesday where they learned the bad news. The self-insurance pool includes Mercer, Auglaize, Van Wert, Shelby and Hancock counties.
    Each county will see a slightly different increase based on premiums paid in and claims paid out in recent years. Based on information at Tuesday's meeting, Mercer County will see a 30 percent increase and Auglaize County will see costs rise by about 28 percent. Van Wert County will see the steepest increase among pool members at 34 percent; Shelby and Hancock counties will absorb 30 percent increases.
    "A double-digit increase in any business is not good - unless it's revenue," Auglaize County Commissioner John Bergman said.
    There was discussion among county officials of implementing a 42 percent increase of what each county pays for its insurance to help build up the pool's depleted reserves. The majority decided, though, to go with the smaller 30 percent increase this year and revisit the issue next year.
    The pool began 2002 with a $2.2 million cash reserve, netted from carry-ver money accumulated through the years That amount is expected to dip below $900,000 by the end of the year.
    It is important to have reserve money to handle excessive claims and to buy out any county that would decide to leave the pool, Mercer County Commis-sioner Jerry Laffin said.
    Each county will have an opportunity to reduce the stiff increases slightly through modifications to the coverage extended to employees in each county. For example, deductibles could be raised, co-pays could be adjusted or employee contributions could be increased, commissioners in both counties said. In Mercer County, Laffin said changes to prescription drug benefits also are possible. Auglaize County workers are covered by a separate prescription drug plan not part of the MEBC.
    Laffin said he believes such adjustments could lower the anticipated spike in costs by 8 or 9 percent.
    Auglaize County has 291 employees eligible for health insurance. For this year, family coverage cost $806 per month and single coverage was $314. Auglaize County workers pay 6.5 percent of the premiums.
    A 28 percent rise in costs would push total 2003 health insurance expenses in Auglaize County to $266,000 up from about $207,000 for this year.
    In Mercer County, 232 employees are covered by the county's health insurance plan. Family coverage costs $659 and single coverage is $235. Most Mercer County employees make no contribution to the premium.
    A 30 percent rate increase would push costs for 2003 to $210,750, up from $162,116 for this year.
    Pool officials also voted to change the level at which the reinsurance program that backs the self-insurance pool kicks in. Currently, claims in excess of $75,000 are turned over to the reinsurer. Beginning in 2003, claims over $50,000 will be handled by the reinsurance.
    Despite the steep rise in costs expected for next year, Laffin said it is not a catastrophic situation. Pool members, especially Mercer County, have seen minimal increases in recent years. Mercer County health insurance costs rose 7 percent from last year; Auglaize costs went up 9 percent.
    "We've got to consider that we went three or four years with minimal increases," Laffin said. "When you look at other insurance programs, increases of 15 to 25 percent are not uncommon."

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