County's health costs run deficit
By LISA GREENE
Facing a projected $5.3-million shortfall in its health insurance fund, Pinellas County may have to raise the cost of health insurance for its 6,600 employees.
The deficit, caused by escalating costs in medical care and prescription drugs, also could force the county to take money from its general fund, already squeezed by declining revenues and other expenses.
The timing could not be worse for the county, which is struggling to trim expenses because of reduced tourism revenue since the Sept. 11 terrorist attacks.
And that's not the only drain. The county is being forced to buy costly new voting machines after last year's election problems, and it had to cut back on several building projects because of budgeting problems with its Penny for Pinellas sales tax revenues.
"I'm well aware of the Penny for Pinellas problems and the voting technology situation, but I'm also well aware that this is a part of doing business," said Dave Libby, the county's personnel director, on Tuesday.
"It's sort of what all the employers out there are experiencing, with rapid inflation" in medical costs, especially prescription drugs, he said.
Health care plans often increase from year to year, but the county's situation may force an increase in employee rates this spring, halfway through the fiscal year. Employees also could wind up paying a larger share of the costs, officials said.
This year, the county's health care plan, administered by United HealthCare, was prepared to pay $34.7-million in claims, a combination of $5.7-million from employees and $29-million from the county.
But costs for this fiscal year, from last month through next September, are expected to hit $40-million.
The county's health insurance system is managed by Libby's department, which reports to the Unified Personnel Board, an independent county agency. The board is funded by the County Commission but does not report to interim county Administrator Gay Lancaster.
"You can't say it was anybody's fault, (that) they should have seen this," Libby said. "There's no way to see these kinds of things."
John Ricco, who works on health insurance issues for the Florida Association of Counties, said counties across the state have been hit by higher insurance costs over the past few years. It's hard to say whether Pinellas should have anticipated the spike, he said.
"A large factor in health insurance is . . . basically how sick your employees are," Ricco said. "If you just have a bad year and have a lot of heart attacks or something, that's beyond the control of the county."
Charlotte County, for example, had to scramble to cover higher insurance costs this fall a week after commissioners passed their annual budget.
In Pinellas, a consultant has recommended that the county share the cost of the increase with employees. If employees paid the entire cost, their current contributions would nearly double.
Employees now choose between two plans. Individuals can choose between a plan that is free, and one the provides greater coverage at a cost of $12 a month. Families pay $103 for the first plan, and $188 for the second. Retirees have a separate pay range.
The final decision on how to overcome the shortfall will be made by county commissioners, but Libby said he wants both the county government and its employees to contribute.
"I don't think either one should bear the burden of the whole thing," he said.
Libby said that the insurance fund is not out of money. "It's a chunk of change, but it's not something that can't be made up," he said.
- Times staff researcher Caryn Baird contributed to this report.
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