Search over, district weighs health care options
By ROBERT KING
© St. Petersburg Times,
Two months ago, Superintendent John Sanders declared the school district's self-funded health insurance plan a complete failure that was devastating the district's finances. The School Board agreed.
Hoping for sunnier days, Sanders and the board began seeking a private health insurance company to take on cost risks that have been bludgeoning the district's budget. But last week, when the deadline for proposals arrived, there was only one taker.
Blue Cross and Blue Shield of Florida was the only company willing to make an offer to cover all the district's health insurance needs for one set annual premium.
Three other groups offered bids that would leave the School Board in the same boat it is in now -- proprietor of its own health insurance fund and responsible for paying claims from its own coffers, regardless of how high they climb.
It isn't clear yet how much the newly proposed plans will cost. District officials hope to have a better handle on it after a consultant analyzes the thick proposals, which arrived Thursday in heavy packages.
Though health care seems far removed from the business of educating children, it is a key part of the benefits given to 1,850 school employees and 350 of their dependents. And more than $2-million of cost overruns in the past two years have siphoned away money that could have been used for teacher raises or classroom supplies.
In seeking bids, Sanders and the board hoped to give up self-insurance for the sake of making their health care costs more predictable. And they hoped to get more than one bid for full-service insurance.
"I would have thought we'd at least get two or three," said board member Robert Wiggins.
At the same time, board members understand that companies might not be eager to offer a full-service insurance plan to a district that can't seem to rein in its health costs.
"I'm not surprised because of our track record," said board member Sandra Nicholson. "We are not looked upon favorably in that industry right now."
Nicholson said insurers perceive the district as having more severe employee illnesses than other businesses or entities its size.
Despite their desire to get out of the self-insurance business, board members say they will consider all four proposals. Hopefully, they said, someone has come up with a way to run self-insurance more efficiently.
The three companies proposing self-insurance plans are familiar to the school district.
Humana Inc. of Tampa was the school district's full-service insurer from September 1994 to January 1997. The relationship ended when Humana proposed a 55 percent rate increase.
This time, Humana is proposing to handle only administrative services, such as billing and setting up networks of doctors and other health providers willing to provide services at fixed costs.
CBSA Inc. of Tampa is the current manager of the district's self-insurance plan. It acquired the district's business when it bought Robey-Barber Inc., which managed the self-insurance plan at its inception two years ago.
Given the track record, School Board chairman Jim Malcolm said he's leery of sticking with the same company that held the district's hand as it waded into debt.
Malcolm and other school officials admit CBSA isn't entirely to blame.
They give much of the blame to bad cost estimates Robey-Barber inherited from HIP Health Plans of Florida, the district's last full-service health insurer.
The North East Florida Educational Consortium, based in Palatka, is a group of 11 small school districts that joined forces to increase their purchasing power on things such as health insurance, casualty insurance and workers' compensation.
Hernando already is part of NEFEC's casualty and workers' comp programs. But it isn't currently part of the health care alliance.
The School Board must decide which plan provides the most benefits for its limited health care budget, expected to be roughly $6.4-million this year.
They need to make a decision by Aug. 7 so the new health plan can kick in by Sept. 1, when their existing coverage expires.
- Times staff writer Robert King covers education in Hernando County and can be reached at 754-6127.
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