City insurance hike slides in much lower than expected Written by Joe Awad Tuesday, June 25, 2013 5:36 PM Sometimes when the can is kicked down the road, you end up in a better place than expected. That’s the case with the City of Harrison in its continuing struggle with escalating health insurance costs. This time last year, the city was rocked with a 45 percent increase. This year, the anticipated 9.5 percent hike is more manageable, said Mayor Joel McGuire. Keep in mind, however, the 9.5 percent hike is on top of the 45 percent increase, so insurance for city workers has increased 54.5 percent since 2011. Changing industry Unlike last year, the city found a partner in Anthem, which will take over the program from Humana in early July. “There isn’t any savings. It’s just not as much of an increase as we thought. It’s still going up. It’s still 9.5 percent on top of the plateau of the 45 percent increase from last year,” said McGuire. “It’s just less of a hit. I would not call it a savings at all.” The 9.5 increase is spread over the rest of this year and through June 2014, he explained. “So for the rest of this year, we have to come up with about a 4.5 percent increase,” said McGuire. The city is in a good position to come up with the 4.5 percent hike for the remainder of the year. Instead of having to fork out $200,000 more if the increase had been about 35 percent, the city now will pay about $35,000 through next June, he said. “We did not adjust who pays what deductible … It’s still the same system. Employees are responsible for only the first thousand, and we cover the other $4,000 that’s remaining on the deductibles. The contribution is still a Cadillac plan. By medical definition, it’s still a Cadillac medical plan.” said McGuire. “It’s not as bad as it could have been by a wide margin.” Councilman Jim Robertson dubbed the change in the insurance climate over a year as “a miracle.” “The group health landscape has changed markedly with the advent of the Affordable Care Act (Obama Care), and some of the other changes coming up,” said Robertson. “Consequently, some of the other insurance companies now are a little more amenable to taking certain risks due to some of the provisions of the Affordable Care Act.” He cited pre-existing conditions as a category that no longer can be used to jack up costs. “It was felt also, even by Humana, that some of our main problems we have had here within the group are on the back side now. In other words, people with serious conditions, which we have had big claims on, we are going away from that,” said Robertson. Humana offered a 26 percent hike, while Harrison officials were anticipating a 30-35 percent increase. Anthem, which had refused to quote the city for at least two years, decided Harrison now is a good risk and offered the 9.5 percent deal, he said. Insurance coverage to the city’s 78 union participants should be substantially similar to the existing program, said Robertson. Although city officials had anticipated a 30-35 percent increase taking effect in July, the money was not budgeted. If worse had come to worse, “draconian-type cuts” or redirecting money would have been necessary to pay for insurance coverage, he said. Last year, McGuire characterized the anticipated increase this year as kicking the can down the road. Harrison’s union members’ insurance program remains an excellent package, said Robertson. Some participants will pay a slightly higher premium but the city pays up to $797 on all premiums for all plans, and then pays half of the remainder of the premium, he said.
Posted on: Tue, 02 Jul 2013 11:40:02 +0000
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