Competition drives down health insurance bids for BASD

Shopping providers enables district to get better deal

By Jennifer Eisenbart

Staff Writer

How much savings is enough?

That’s the question the Burlington Area School District Personnel Committee was presented with Monday night as Dan Martin of Hausmann Johnson Insurance came to the committee with the numbers coming from bidding out the district’s health insurance.

After receiving a cost increase from Humana – the district’s current provider – Martin also got bids from four other providers.

With that information, Humana agreed – in an effort to keep the district’s business – to a zero percent increase.

That information was met with relief from Josh Dow of the Burlington Educational Association, the teacher’s union for the district.

“If I understand this correctly, we could have a zero percent increase?” said Dow. When that was confirmed, Dow expressed enthusiasm for the plan.

However, those numbers weren’t enough to satisfy some on the board. In the end, Martin was asked to go back to the insurance providers and ask for alternate numbers with two key changes to the two policies – one an increase in the out-of-pocket maximum, and then changing the co-insurance from 100 percent covered in network to 90 percent covered (with 10 percent to be picked up by employees).

“Your rates could come down accordingly,” Martin said.

The request is the latest in a line of discussions on how to best handle the district’s health insurance costs. For the last two budget cycles, the BASD School Board been criticized by some for not asking staff members to pay a portion of their insurance premiums.

The opposition to that school of thought has pointed out that the district has saved millions by going to cheaper insurance, and shouldn’t have to ask staff to pay – yet.

The health insurance numbers brought forth Monday night work on two different plans – as the district has for the last year. The first plan, a high-deductible health savings account program, does not require staff to pay a portion of the premium.

However, that plan has a $1,500 deductible for single coverage, and a $3,000 deductible for families.

The other plan, a PPO, has much lower deductibles and office co-pays, but the cost of the higher premium must be made up by employees – at the cost of about 11 percent of the premium cost.

Both programs have co-insurance coverage at 100 percent for in-network visits and 70 percent for out of network. The out-of-pocket maximum for the HSA plan is $1,500 in network and $15,000 out of network. For the PPO plan, the out-of-pocket cost is $250 in network and $2,500 out of network.

Humana’s originally quoted cost for the two plans would have been $443,727 per month, an increase of about 13 percent.

Martin also bid those two plans out to Anthem – on both a regular PPO/HSA and using Anthem’s Blue Priority Network – and came back with costs of $392,110 and $357,960.

WCA/GHT came in with numbers of $392,613 and $404,585 for the same options, dependent on the maximum rate increase guarantee. WPS came in at a cost of $426,928 per month.

When Martin went back to Humana with those numbers, Humana agreed to hold the rate increase to zero. Martin cautioned the board Monday night, though, that the reason Humana agreed to the zero percent increase was because the district had shopped around.

If the district goes with Humana continually, Martin said, those shopped rates will likely no longer be offered – and Humana will have no incentive to drop the renewal costs.

After confirming the district would remain in compliance with the Affordable Care Act regardless of what programs it offered, members of the committee had two questions: whether the district was not gaining enough savings by keeping the deductible and the out-of-pocket maximum at the same amount, and whether the co-insurance would be better served at a 90 percent coverage in network, with employees paying the other 10 percent.

Martin expected to have new numbers with those new provisions later this week.

The numbers quoted covered health insurance only. Dental and vision coverage were quoted separately, with little to no increases on various providers and even a drop in some cases.