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Health Care Bill Affecting City Insurance Premiums
By Echo Menges
Ed Anderson from Hawkins Insurance was at the regular session Edina City Council meeting held Monday, October 11, 2010 to address the Council about changes and a cost increase to the City’s employee health insurance policy.
“The overall increase comes to about 8.8 (percent). The official notice from Blue Cross is at 8.6 (percent), but there has been some changes that have transpired after the figure was calculated that could increase these slightly.” Anderson told the Council.
Anderson handed out a form with the current benefit package and a review of a rate deduction by moving the current deductible level for each City employee from $1,500.00 to $2,500.00, which would reduce the cost 2.6 percent.
Anderson recommended the Council follow their old plan, “with no changes,” in order to preserve the grandfathered status of the plan they already have, though he could not give the Council any guarantees on what the grandfathered status would include pointing to the enactment of the Health Care Reform Bill signed into Federal Law earlier this year.
“It hasn’t all been sorted out yet. Insurance companies and the Federal Department of Health and Senior Services are working out just how this will be implemented. It is a gradual implementation. Some of the impacts will be available on your plan at renewal. For example we will allow dependants to remain on the plan up to age 26, the elimination of lifetime limits on the policies, and those children who are on the plan who are 19 and under (and are not covered by another provider) will be fully covered with no limitations.” Said Anderson.
He went on to tell the Council there are “other” annual limits to their health insurance policy which are being adjusted saying he would be making a comprehensive list of what they are and briefly touched on a few examples of limit adjustments that would increase the limit the insurance company will pay on, things like medical equipment and private nursing.
“We are trying to give you the best advice that we know considering this is a fluid scenario and some of the parts of the Health Reform Bill aren’t implemented until 2020.” Anderson joked to the Council, “Maybe we’ll be able to see it more clearly then.”
He presented the Council with special packets put together for City employees explaining different medical services and costs. He said employees would also be able to track their claim information on line.
“We have had, to my knowledge, no complaints on claims or payouts during the last year, which is encouraging.” Said Anderson.
He spoke candidly to the Council about the 2600 page document, which is the Health Care Reform Bill, admitting he was still trying to “digest” it.
“One of the important features that we’re frankly battling with is that effectively January 1 of 2011 insurance companies are required to pay out 80 percent of all premiums and claims and on larger groups 85 percent. We don’t think that’s going to be a problem for Blue Cross because they’re right at that mark now, but there are insurance companies that are exiting the market place because of that limitation. And we know that several large corporations including McDonald’s have gone to the Federal Government asking for a waiver. In fact the former curator the City had before Blue Cross, Principle, has notified us they are terminating all coverage with Principle and their business is being re-written from United Health Care. That’s a major player in the marketplace here in the mid-west. I’m afraid it’s a symbol of things ahead for the insurance industry.” Said Anderson. “It (the Health Care Reform Bill) inhibits the company from building reserves during bad times and companies like Principle were concerned because they’re a stock company. The only place left to go was their stock holders and they thought that would have an adverse effect.”
Mayor Stricker did raise concern about raising the deductible of the City’s plan $1,000.00 and still only saving 2.6 percent.
In the end, the Council opted NOT to increase the plan’s deductible by $1,000.00 and voted unanimously to to continue coverage under the same plan with Blue Cross/Blue Shield through Hawkin’s Insurance. City employee’s deductibles will not be raised but their premiums will.