mak2
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I just found this article interesting.
http://hneolive.dailyjournal.net/Da...al&BP=OK&Daily=DJJ&AppName=1&AW=1281698747312
Publication: Daily Journal; Date:2010 Aug 13; Section:Front Page; Page Number: A1
Health costs pinch budgets
Insurance rates rise even as tax receipts decline
BY ANNIE GOELLER
DAILY JOURNAL STAFF WRITER
agoeller@dailyjournal.net
In a year when tax collections are down and local officials are concerned about budget shortfalls, l o c a l gove r n - ments expect to get hit with an i n c re a s e d ex - pense.
Health insurance costs are expected to rise between 5 percent and 30 percent for local governments, adding to their cashstrapped budgets.
Increases in insurance costs aren’t new, and local officials have continued to look to wellness programs and health savings accounts to try to decrease spending. But the cost increases often are unavoidable.
When government employees or their families are diagnosed with expensive medical conditions, such as cancer, everyone picks up the high costs of treatment. For governments with fewer employees, the cost is harder to spread out, meaning everyone pays significantly more when a few have serious illnesses. And local governments aren’t the only ones facing higher costs.
Business leaders said they expect their insurance costs to rise next year, too, just as they have for at least the past decade.
Health insurance costs are increasing for multiple reasons, including higher costs for health care and inflated rates when a few employees become seriously ill, local officials and business leaders said. At Franklin United Methodist Community, insurance costs have increased an average of 12 percent a year for the past 10 to 15 years, executive director Joe Trueblood said. And he believes the same will be true in 2011.
“There’s no reason to believe it won’t happen again. It’s happened pretty much every year,” he said.
The senior living community has offered smoking-cessation classes and weight-loss programs along with offering employees a wellness center. But that can’t compete with higher health care costs due to new technology and procedures, Trueblood said.
In New Whiteland, health insurance costs are expected to increase 30 percent next year, or about $6,000 per month, with the town paying 70 percent and employees paying the rest, clerktreasurer Maribeth Alspach said.
Most of that increase is due to a few employees who have had serious health issues, including cancer, she said. With only 23 employees, costs of a serious medical condition are harder to spread out, meaning everyone pays more.
‘Best we can get’
Town officials have looked at options to reduce costs, such as getting onto a different plan or being self-insured. But consultants have found that with the current medical conditions of insured employees, the town wouldn’t be able to save any money, she said.
“It comes back that the policy we have, as ridiculously expensive as it seems to be, is the best we can get based on our current group,” Alspach said.
The high costs led the town to stop a tradition of charging employees less than $10 per year to be on a single plan and have made government benefits, typically thought of as some of the best, less appealing to employees, she said. Next year, employees will pay another $100 per paycheck to be on the family plan, Alspach said.
Some have decided the cost isn’t worth it, since employees also pay a $7,500 deductible and $5,000 for out-of-pocket expenses for the family plan, she said. Some employees have joined their spouse’s plan or removed their children from the town’s plan, she said.
Higher health insurance costs have led other local governments to change the plans offered to employees, requiring workers to pay more.
Johnson County switched to higher deductible health savings accounts last year, requiring employees to pay $3,000 for their medical costs before insurance will pay for procedures and visits, commissioner John Price said.
That decision has significantly reduced insurance costs, with the county expected to cut its spending by about $500,000 this year, he said.
The county also has focused on education, teaching employees to be healthier and seek preventive care, and how to save money. Employees have used three times more generic prescriptions this year than in the past, which saved thousands, Price said.
But even with those changes, Price said he can never guarantee what the county’s health insurance costs will be, especially if a few employees become seriously ill.
“I can’t tell you what my health will be next week, nor can I tell what it will be for 490 employees and their families,” he said.
Numbers vary
Not knowing how much an increase will be can be difficult for business owners and local governments when trying to budget how much they will spend each year.
Insurance costs are based partly on what was spent the previous year but also include such factors as what the overall cost of health care and insurance is doing at the time and employee health, said John Papandreou, general manager at KYB Manufacturing. And those are hard to predict, he said.
“Who knows what’s going to happen,” he said.
The company tries to reduce its costs through wellness programs, incentives for screening and preventive care, nonsmoker discounts and prescription drug discount programs, he said.
The same is true with the White River Township Fire Department, which already has high-deductible plans and health savings accounts and offers health screenings for employees, Chief Jeremy Pell said.
But the department is still projected to have an increase between 20 percent and 25 percent next year, he said. That number could change based on how many claims employees had this year, which will affect next year’s rates. But that won’t be known for a few more months, he said.
Until then, the department can only wait and hope that the numbers stay nearly the same. If they come in higher, officials will need to decide how that increase will be distributed between the department and its employees, he said.
Deciding who pays is different depending on the government.
At Franklin schools, officials predict an increase in health insurance costs of 3 percent to 10 percent, said Jeff Mercer, director of business and operations. The district won’t know until October how those numbers will come in.
And when it is known, any increase employees pay would have to be negotiated with the teachers union, he said.
In Center Grove, insurance costs are increasing 8 percent over the next year, but the district is paying for most of that increase, said Paul Gabriel, chief financial officer.
The increase was about what officials expected when budgeting for this school year, but that doesn’t make an increase any easier to pay for, especially when funding is being cut, he said.
http://hneolive.dailyjournal.net/Da...al&BP=OK&Daily=DJJ&AppName=1&AW=1281698747312
Publication: Daily Journal; Date:2010 Aug 13; Section:Front Page; Page Number: A1
Health costs pinch budgets
Insurance rates rise even as tax receipts decline
BY ANNIE GOELLER
DAILY JOURNAL STAFF WRITER
agoeller@dailyjournal.net
In a year when tax collections are down and local officials are concerned about budget shortfalls, l o c a l gove r n - ments expect to get hit with an i n c re a s e d ex - pense.
Health insurance costs are expected to rise between 5 percent and 30 percent for local governments, adding to their cashstrapped budgets.
Increases in insurance costs aren’t new, and local officials have continued to look to wellness programs and health savings accounts to try to decrease spending. But the cost increases often are unavoidable.
When government employees or their families are diagnosed with expensive medical conditions, such as cancer, everyone picks up the high costs of treatment. For governments with fewer employees, the cost is harder to spread out, meaning everyone pays significantly more when a few have serious illnesses. And local governments aren’t the only ones facing higher costs.
Business leaders said they expect their insurance costs to rise next year, too, just as they have for at least the past decade.
Health insurance costs are increasing for multiple reasons, including higher costs for health care and inflated rates when a few employees become seriously ill, local officials and business leaders said. At Franklin United Methodist Community, insurance costs have increased an average of 12 percent a year for the past 10 to 15 years, executive director Joe Trueblood said. And he believes the same will be true in 2011.
“There’s no reason to believe it won’t happen again. It’s happened pretty much every year,” he said.
The senior living community has offered smoking-cessation classes and weight-loss programs along with offering employees a wellness center. But that can’t compete with higher health care costs due to new technology and procedures, Trueblood said.
In New Whiteland, health insurance costs are expected to increase 30 percent next year, or about $6,000 per month, with the town paying 70 percent and employees paying the rest, clerktreasurer Maribeth Alspach said.
Most of that increase is due to a few employees who have had serious health issues, including cancer, she said. With only 23 employees, costs of a serious medical condition are harder to spread out, meaning everyone pays more.
‘Best we can get’
Town officials have looked at options to reduce costs, such as getting onto a different plan or being self-insured. But consultants have found that with the current medical conditions of insured employees, the town wouldn’t be able to save any money, she said.
“It comes back that the policy we have, as ridiculously expensive as it seems to be, is the best we can get based on our current group,” Alspach said.
The high costs led the town to stop a tradition of charging employees less than $10 per year to be on a single plan and have made government benefits, typically thought of as some of the best, less appealing to employees, she said. Next year, employees will pay another $100 per paycheck to be on the family plan, Alspach said.
Some have decided the cost isn’t worth it, since employees also pay a $7,500 deductible and $5,000 for out-of-pocket expenses for the family plan, she said. Some employees have joined their spouse’s plan or removed their children from the town’s plan, she said.
Higher health insurance costs have led other local governments to change the plans offered to employees, requiring workers to pay more.
Johnson County switched to higher deductible health savings accounts last year, requiring employees to pay $3,000 for their medical costs before insurance will pay for procedures and visits, commissioner John Price said.
That decision has significantly reduced insurance costs, with the county expected to cut its spending by about $500,000 this year, he said.
The county also has focused on education, teaching employees to be healthier and seek preventive care, and how to save money. Employees have used three times more generic prescriptions this year than in the past, which saved thousands, Price said.
But even with those changes, Price said he can never guarantee what the county’s health insurance costs will be, especially if a few employees become seriously ill.
“I can’t tell you what my health will be next week, nor can I tell what it will be for 490 employees and their families,” he said.
Numbers vary
Not knowing how much an increase will be can be difficult for business owners and local governments when trying to budget how much they will spend each year.
Insurance costs are based partly on what was spent the previous year but also include such factors as what the overall cost of health care and insurance is doing at the time and employee health, said John Papandreou, general manager at KYB Manufacturing. And those are hard to predict, he said.
“Who knows what’s going to happen,” he said.
The company tries to reduce its costs through wellness programs, incentives for screening and preventive care, nonsmoker discounts and prescription drug discount programs, he said.
The same is true with the White River Township Fire Department, which already has high-deductible plans and health savings accounts and offers health screenings for employees, Chief Jeremy Pell said.
But the department is still projected to have an increase between 20 percent and 25 percent next year, he said. That number could change based on how many claims employees had this year, which will affect next year’s rates. But that won’t be known for a few more months, he said.
Until then, the department can only wait and hope that the numbers stay nearly the same. If they come in higher, officials will need to decide how that increase will be distributed between the department and its employees, he said.
Deciding who pays is different depending on the government.
At Franklin schools, officials predict an increase in health insurance costs of 3 percent to 10 percent, said Jeff Mercer, director of business and operations. The district won’t know until October how those numbers will come in.
And when it is known, any increase employees pay would have to be negotiated with the teachers union, he said.
In Center Grove, insurance costs are increasing 8 percent over the next year, but the district is paying for most of that increase, said Paul Gabriel, chief financial officer.
The increase was about what officials expected when budgeting for this school year, but that doesn’t make an increase any easier to pay for, especially when funding is being cut, he said.
