A Clarification to My Recent Post on City-County Health Care Plans

by jhwygirl

I’m actually going to pull this directly out of comments on my recent post titled Self-Insured Employee Health Care is a Disaster-in-Waiting. Ward 2’s Pam Walzer – who sits on a city/employee committee that regularly discusses health care insurance policy issues – has written a clarification to my previous post. I want to make sure that everyone gets to see it.

Reposted directly from Pam’s comment:

It’s taken me time to get back to this topic as I left town shortly after this was blogged and did not have the time to write an detailed response. There are several errors in the blog that I would like to correct about the City’s self-insurance plan.

1.) The city’s plan is a qualified health plan, administrated by Allegiance, that meets all requirements for “credible coverage.” When an employee or covered family member leaves the plan, they are provided with a letter indicating that they have had continuous credible coverage. In addition, the city offers COBRA for participants exiting the program.

2.) The total contribution from the city ($670) and employee ($10) of current $680/month, to be reduced to $580/month, for individual coverage is for more than health insurance. It also provides for life insurance and a wellness plan that many call to as to why the claims have been so low and the fund balance has been growing. Employees are encouraged to exercise, eat right, deal with stress, lose weight, have annual blood screenings, etc.

3.) You have said that by being self-insured, that the city is setting itself up to serious financial peril in the event of a catastrophic illness or injury. That is a valid concern and that is why the city also purchases “stop-loss insurance.” In the event a covered member has over $130,000 in expenses per year, the costs are picked up by a separated insurer. If a covered person has a $1,000,000 year, the city’s plan only pays the first $130,000 (after deductible, etc). The cost of this stop-loss insurance is included in “The Plan’s” costs.

4.) Why not join a larger group to get better rates?The city has the option to join the health insurance benefit plans through the Montana Municipal Insurance Authority (MMIA), which covers several other cities throughout the state. If we did, we would see an INCREASE in our rates as we are the big fish in the pond. As bad as our health care costs are in Missoula, they are less than those around the state. In fact one city (I can’t remember now if was Bozeman, Helena, or Kalispell) just dropped their self-insurance option and joined the MMIA with an increase of around 17% in cost. If we joined the MMIA pool, the other cities woudl see a decrease in their rates and we would see an increase in ours.

5.) I think that it is worth while to see if the city and county can join plans. I will be working on seeing what would be the up/downsides of this idea. We do have different plans and cost breakdowns, different contribution levels for single, partner, child, family options. My first look kind of pencils out to be about equivalent – but it is worth checking into and I will.

6.) You’ve said that you think that the current costs, whether $680/ month or $580/month are excessive and that employees would do better on the open market. That might be true for young, health men, but not so much so for the entire work force. My sister works for an insurance services company in Baltimore County that provides insurance products for small companies and individuals. She has the resources to find the very best rates and plans and for her 4 person family has to pay $1400/month! That does not include life insurance or a wellness advocacy program. She thinks that $680 is a steal! Of course, I misplaced the costs that city employees pay to cover spouse/domestic partner and children, but I believe that is much less than $100/month.

7.) And maybe one of the best reasons to be self-insured is that the city is in a better position to show compassion. Those who have fought with insurance companies can vouch for the battle to resolve issues. News articles have “blown the cover” on insurance companies who pay staff bonuses to find loopholes to NOT approve benefits. The city has its own conflict resolution process to allow for benefits/bills to be covered/paid when private, for profit, insurance companies would just continue to say no.

Hope this clears up the misconceptions and misinformation about the city’s health plan.

  1. Anon

    Sounds better than what the State offers. $626/mo + I kick in another ~$250 for spouse and Vision/Dental. Vision and Dental are about $60/mo “extra” so about $875/mo for the two of us. I figure that will jump at least $50/mo next year just because they can raise rates plus another $12/mo or so for passing SB234.

  2. nirumi

    Good blog! I

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