By Jennifer Eisenbart
Editor
Like so many other businesses, health insurance survives on making more money than it puts out.
Unfortunately for the Burlington Area School District, that axiom will mean higher deductibles or premium payments from staff members in the future.
Because of several high-expense claims this year, BASD’s health insurance provider pushed the district’s premium increase to the maximum allowed by a pre-approved cap – 9.5 percent.
And because of that cost increase, the BASD School Board Finance Committee recommended unanimously Monday night that those costs would have to be passed on to employees of the school district.
The Finance Committee voted unanimously to go with the first of six plan “suites” as presented, which will offer a higher deductible HSA plan to employees for free, while offering the current HSA program and the PPO program with employees paying contributions.
Dan Martin of Hausmann/Johnson Insurance was on hand to discuss the plan possibilities Monday night, and provided the different options – all of which offered three plans to employees.
It was simple math that led to the premium increase from the district’s health insurance provider. WCA Group Health Trust had collected about $2.43 million in premiums from BASD from July 1 of 2013 through Dec. 31, but it paid out $2.87 million.
There were eight claims of more than $50,000 through March 31, which included a back surgery, several cancer treatments and a cardiac claim, according to Martin.
Negotiating with the WCA Trust last year had allowed BASD to cap its increase in costs at 9.5, but Martin expected the costs to go up again.
“Until our claims get reduced, we’re going to have to work on different benefit designs,” he explained. “That’s just what it is.”
The option the district chose to go with breaks down into three different selections:
• An HSA option with a $3,000 individual deductible and a $6,000 family deductible, with 100 percent coverage in network and 70 percent out of network.
• The current HSA model with a $1,500 single/$3,000 family deductibles with the same coinsurance, but with monthly premium contributions of $45.60 single or $127.87 family.
• The current PPO plan, with a $250/$500 deductible, 100/70 co-insurance and various co-pay amounts. Monthly contributions from employees for that plan would be $112.39 for single and $314.02 for family.
Other packages outlined by Martin included higher deductibles or only 90/70 coinsurance, or involved the district covering 1.5 percent or 3 percent of the additional cost.
The district chose to go with the lowest cost to employees, but with no addition district cost.
The Finance Committee and the assembled members of the School Board also discussed two different possibilities for the future – “tiering” costs so lower-paid employees would not have to pay as much, and contributing to the HSAs by the district.
“It just seems like a big jump,” said School Board member Rosanne Hahn.
Martin replied, “It is.”
But Martin also added that the Whitewater School District’s base plan is an HSA with a $4,000/$7,000 deductible, and said the district is still averaging slightly below the Wisconsin average.
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What would WCA Health Trust have called an acceptable margin of profit? 2%, 5%, 10%, 15%? Maybe the District Finance Committee could negotiate a 9.5% reduction next year if everyone in the district is blessed with perfect health! One other item. Maybe Mr. Martin would not only like to disclose the treatments that caused the increase, but also announce the names of the district employees who required these treatments. These families have already suffered emotionally and physically from the conditions that required them to utilize their benefits. It is so nice of Mr. Martin to add guilt to make it a total package.
Did you read the article? There was no profit, they had a net loss of about $440,000 dollars. I do agree with you that it was tacky to call out the types of claims.
Couldn’t agree with you more Tom. I read the article and my first thought was, “Wow, way to call out all those employees going through serious medical conditions. Talk about the extra guilt they must feel now considering they never asked to be sick!” Given the large employee pool of BASD, there are going to be medical conditions like those listed every year, just sad it feels like the employees going through it this year were called out and will now probably only feel worse!
The WCA Group Health Trust is really just UnitedHealthcare, WCA’s third party administrator of claims. UnitedHealthcare is, of course, a for profit company and they usually have administrative costs of 15-20% (this includes their profit). Without the details, it is impossible to know if the $440,000 loss was really paid to “providers” as the article claims. It is safe to assume the $440,000 is the amount paid to UnitedHealthcare.