Health costs rise under new plan
By ROBERT KING
© St. Petersburg Times,
BROOKSVILLE -- Health-care costs for the Hernando school district would go up by more than $500,000 next year under a new benefits plan labor leaders agreed to support Thursday.
The cost of insuring most of the 1,850 workers on the district's health plan would rise by about 12 percent. Yet as much as that hurts, it is much less than the estimated 30 percent cost increase some officials had been bracing for.
It is not clear yet whether the School Board will cover the cost increase or if it will have to be deducted from the paychecks of employees. That will not be determined until the unions resume their annual contract negotiations next month.
The new coverage, provided by BlueCross BlueShield of Florida, would also put the district's health insurance completely back into the hands of a private company.
For the past two years, the district has insured itself with the help of a private company that managed the paperwork. But that has proven disastrous.
Since September 1999, the school district has paid out roughly $2.4-million more in medical costs than it pumped into the plan from its tax revenues and employee contributions.
That troubling history led the School Board in May to decide to abandon its self-insurance plan. The board must take a formal vote on Aug. 7 to approve the new arrangement. But most board members have been eager to abandon the unpredictability of self-insurance, which left the board solely responsible for covering cost overruns.
With BlueCross BlueShield, the district will pay a fixed monthly premium. BlueCross BlueShield alone would have to bear price spikes.
That predictability will not come without forfeiting some flexibility.
Under the district's self-insured plan, employees had the freedom to go to specialists at their will. Under BlueCross BlueShield, they will have to get a referral from their primary care physician if they want such trips to be paid for by their insurance.
Also, the cheapest benefit package will require employees to enter a health maintenance organization and choose a doctor from a limited list of Hernando County physicians.
What's more, BlueCross BlueShield has a staff of doctors that will review the treatment plans made by local doctors before the company agrees to pay for the services.
With self-insurance, the School Board's private administrator flagged certain treatments. But coverage decisions were left to a committee of school district employees.
In the end, the decision boiled down to dollars.
The $7.1-million premium set by BlueCross BlueShield is the maximum the school district will have to spend on health care this year. The next-closest bid, a self-insurance plan proposed by Humana, left the district vulnerable for up to $8.6-million.
To continue the district's current plan would cost a minimum of $10-million and perhaps more than $12-million.
Union leaders said they expect to hear complaints from employees whose favorite doctors are not part of the HMO network or who encounter coverage disputes between their doctor and the HMO. But given the financial risks and the School Board's desire for predictability, they say BlueCross BlueShield was their best bet.
Jan Mazourek, a teacher at Hernando High School, said the past two years of being free from the restrictions of HMOs will soon seem like a luxury. But it is a luxury the district can no longer afford.
Colin Davies, a custodian at Westside Elementary School who represented the Hernando United School Workers union, supported the change, though he isn't thrilled about it.
"I hate my decision because I am used to liking the availability of doctors we have," he said.
"If we remain self-insured, we will bleed ourselves to death."
-- Staff writer Robert King covers education in Hernando County and can be reached at 754-6127.
Provided the School Board approves the district's new health insurance plan at its meeting on Aug. 7, the switch to BlueCross BlueShield would take effect Sept. 1.
Coverage in the BlueCross BlueShield HMO is similar to the setup currently used by about 95 percent of the district's employees. It has not been decided whether employees or the School Board will pay for the higher costs of the HMO. But here's a look at the increase:
Individual HMO coverage will go from $241 a month to $270.
HMO coverage for an employee plus one dependent will go from $479 a month to $490.
HMO family coverage will go from $681 a month to $718.
Doctor co-payments, which are $25 under the current plan, will drop to $15 for visits to primary care physicians but increase to $35 for certain specialists.
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