City renew employees’ health insurance coverage [The Floyd County Times, Prestonburg, Ky.]

March 28--PRESTONSBURG -- Council members voted to renew the city's health insurance coverage Monday night, and in one respect, city workers will be getting more in the way of benefits.

Darrell Patton, owner of Darrell Patton Insurance, has been working with the city to investigate various health plans, and he said recent efforts to curb costs have been paying off. Patton recommended the city renew its health coverage through Anthem, despite slightly lower bids from Humana and Bluegrass, in part because city workers had already begun paying down their deductibles this year and would have to start all over if the city were to switch to another carrier.

Patton also said Anthem provides a valuable service the other companies do not -- administration of the city's COBRA benefits, for workers who leave their jobs but wish to maintain their insurance -- which more than makes up for the slight difference in cost.

Patton noted that the cost of the coverage with Anthem would rise 4 percent over last year, which he said was outstanding compared to the costs other employers were facing.

"That's unheard of in this industry," Patton said.

Part of the reason for the small increase might be due to employees using their benefits wisely. Patton noted that all employees have been using in-network providers and 96 percent of prescriptions filled under the plan were "preferred formulations" -- usually generics or other low-cost versions of prescriptions. In both cases, he said the employees' actions were resulting in cost savings "for the city, for the insurer and for the employee."

Patton also noted that, compared to other employers, the city's workers have a low rate of hospitalizations. On the other hand, he noted that outpatient services were much higher than normal -- 63 percent over benchmark. However, he said that is not necessarily bothersome for the city, because outpatient services are far cheaper than inpatient services.

"If you have to have one of those figures be higher than normal, you want it to be the outpatient services," Patton said.

The council voted to accept Patton's recommendation to renew with Anthem and also voted to renew a "bridge" policy with Colonial Life, which assists employees with meeting their deductibles.

Last year, as the city wrestled with bringing health care costs in line, the council agreed to a high deductible with Anthem -- $3,000 -- in order to bring the cost of the plan down. At the same time, the city also agreed to the Colonial Life policy, which repays employees $1,500 of that deductible. The cost of the two plans ended up being far lower than a single plan with a $1,500 deductible.

This year, at Patton's recommendation, the city voted to up its coverage with Colonial Life to $2,500, essentially leaving employees with a $500 deductible.

The insurance renewal passed unanimously.

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