Health care puts the squeeze on budgets [Kerrville Daily Times, Texas]

July 31--Health care costs have been on the rise for years and are expected to increase even more.

A recent study by the Department of Health and Human Services showed that premiums rose 3 percent for Americans who received health insurance from their employers between 2011 and 2012.

Among the employers nationwide having to grapple with increased employee health care costs are local governmental bodies and school districts.

At its board of trustees meeting Monday, Kerrville Independent School District officials talked extensively about rising health care costs, particularly related to covering its employee health care premiums.

Last year, the district covered the $298 basic premium health care plan for each employee. This year, the cost rose to $325 for each employee, bringing the district's total health care cost to $226,000 for all employees. Due to limited revenue, the district officials proposed it would not be able to cover 100 percent of the premium and now will require employees to pay $27 a month.

Superintendent Dan Troxell said continuing to pay 100 percent of employee insurance would have required cutting four teaching salaries.

"It's something to think about, and we need some guidance from the board," Troxell told the trustees on Monday. "It's a trade off. Do you want orchestra, band and A's, or do you want to cover health care benefits?"

"What we're trying to do is put every extra dollar in the classrooms," Troxell said.

Hunt Independent School District, a smaller campus with higher property taxes, contributes $350 of the basic health care premium plan for its employees.

Hunt ISD superintendent Crystal Dockery said covering the basic health care plan helps the district remain competitive with surrounding schools.

"People will stick around for any kind of benefits," she said. "We don't pay salary as well as Kerrville, and we're comparable to Ingram ISD, so we try and provide some type of benefit."

The city of Kerrville also has seen an increase in health care costs but so far has managed to maintain funding the basic premium for its employees. The city currently covers 100 percent of its individual employees' health care costs, paying $7,100 per employee per year.

In its preliminary 2013-14 budget, the city expects a $400 per employee increase each year, which the city so far is budgeting for. That budget continues through workshops and will be adopted by Oct. 1

Currently, the city also pays between 57 and 61 percent of coverage for employee dependents. In its proposed budget, it will decrease that amount to 55 percent.

Kimberly Meismer, director of general operations for the city, said she expects health insurance costs to continue to rise.

"We've had to really fight to keep ours where they were manageable -- changing our plan, getting creative with plan design," Meismer said. "I think we'll probably have to pass on more cost for dependent coverage to the employees. We take care of our

No. 1 resource, which is our employees, and hope to continue to provide 100 percent (of the premiums) for our employees."

The county pays 100 percent of medical and dental insurance premiums for employees only and does not pay any portion of the premium costs for dependents.

"Based on what's happening with medical costs generally, yes, I anticipate some increase," said Kerr County Judge Pat Tinley, who serves as chief financial officer for the county. "That's just the way it's been going for years. ... It seems to be a never-ending spiral."

Like Hunt ISD, Tinley said the county doesn't pay as well as other public sector entities, but he said people often want to work for the county because of its good medical insurance package.

"One of the ways we are able to keep our team together over here is by having a decent health benefits package. Obviously, if they are looking for the higher wage scale, they are looking elsewhere," he said.

Dene Huffaker, Ingram finance director, said the city health insurance costs will stay the same next budget year. Huffaker said she doesn't know precisely why it's not increasing, just that it is affected by the amount of claims and the percentage of customers in the group's insurance network.

Huffaker said it's possible health insurance costs may increase in 2015.

"I don't have a clue at this time what it's going to do," Huffaker said.

Patrick Murray, CEO of Peterson Regional Medical Center, said the hospital is working to address unintended consequences of residents left without health care coverage.

"We recognize that health care is changing, and it's transforming into something different and putting a financial pressure on patients," he said.

Murray said collecting deductibles from patients is sometimes a challenge, and the hospital is forced to budget its finances to accommodate expenses and continue to maintain its debt charity care program that helps low-income patients.

"We try and have conversations with the community on how you can best and most appropriately get care that they need," he said. "I think there is certainly more dialog rather than transaction."

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