Wood County looking at insurance increase

PARKERSBURG – Wood County commissioners were told they are probably looking at a 10.7 percent hike in health insurance costs for the coming year.

Meeting with the commission Monday, Mark Schwendeman, an insurance consultant who has been under contract with the county since 2007, updated county officials on the status of coverage, potential changes resulting from federal health care reform and policy changes that could impact costs. The county’s health insurance coverage is through Highmark Blue Cross Blue Shield.

“We have conducted a market search with five other insurance carriers. Other proposals are coming in and are being analyzed now. It’s a July 1 renewal. According to Highmark Blue Cross and Blue Shield’s renewal formula, the renewal rates for the year July 1, 2013, through June 30, 2014, were originally proposed to increase 14.27 percent, with an additional 1.58 percent due to federal Health Care Reform Act taxes, for a total increase of 16.08 percent,” Schwendeman said.

However, a rate cap was agreed to last year of 9 percent.

“Therefore the total rate increase offered at renewal is 10.73 percent, comprised of 9 percent due to the rate cap, and the federal health reform taxes of 1.50 percent. The federal reform act taxes attributed to $33,616, this year alone,” Schwendeman said.

The federal tax reform taxes include a patient-centered research fee assessed per insured. It also includes a temporary reinsurance fee to begin funding a pool for exchanges scheduled to come into place in 2014. Anyone with insurance now will be assessed an additional $63 next year. The third fee, according to Schwendeman, is to help create a fund to cover for pre-existing conditions for individuals who are not covered.

“It’s an estimate by the insurance company,” Schwendeman said. “We are really just starting to see the effects of additional costs associated with federal health care reforms.”

The total paid for medical and prescription drug claims from Dec. 1, 2011, to Nov. 30, 2012, was $1,666,838, compared to paid premium of $1,980,080 for a lot ratio of 84.18 percent, according to Schwendeman’s report.

The county’s health insurance plan is comprised of a High Deductible Health Insurance Plan and a Health Reimbursement Arrangement.

“The 10.7 percent is more than likely be High Mark’s best offer,” Schwendeman said.

There were a total annual premium of July 2010-June 2011 was $2,293,341; July 2011-June 2012, $2,683,296; July 2012-June 2013, $3,023,020. With the high deductible and HRA, the annual premium total cost for the same time periods were: $1,977,354; $2,065,708 and $2,248,658.

“The total savings for three years was $1,707,938,” Schwendeman said. “This arrangement has been a good program for the county. The program, as we see it works well, combined with the wellness program you have that is ongoing and the financing arrangement as compared to the previous program.”

Schwendeman estimated the HRA would be about $320,000 for next year.

“We’ve plugged in $350,000 for the budget, so that should be safe. We have utilized a portion of those funds that were left as a wellness dividend to the county employees,” Commissioner Blair Couch said.

Schwendeman said the county and others will see more changes in 2014 and he suggested the county start reviewing its options now.

Wood County clerk Jamie Six said not all has gone smoothly with the HRA system.

“My office gets a lot of complaints. Reimbursements don’t always flow well. While the numbers may indicate we need to keep the program, we need to look at ways to make the administration run more smoothly for the employees,” Six said. “Checks are delayed, some don’t understand the procedure. It’s creating a hardship on some of our families.”

An employee benefits committee made up of officials and representatives from all the county offices meets regularly and makes suggestions and comments on changes in policies for insurance coverage and coordinates and proposes wellness activities. Under the county health insurance plan, the employees have their own health insurance paid by the county. If the employee pays for additional family coverage, they pay a percentage of the additional cost.

Employees pay a $2,750 deductible, with the employee paying the first $250 annual deductible, the county reimburses them for the next $2,000, and the employee pays the next $500 out of pocket.